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EXHIBIT (10)h.
GENESCO INC.
MANAGEMENT INCENTIVE COMPENSATION PLAN
FISCAL YEAR ENDING JANUARY 31, 1998
1. PURPOSE.
The purposes of the Genesco Inc. Management Incentive Compensation Plan ("the
Plan") are to motivate and reward a greater degree of excellence and teamwork
among the senior executives of the Company by providing incentive compensation
award opportunities; to provide attractive and competitive total cash
compensation opportunities for exceptional corporate and business unit
performance; to reinforce the communication and achievement of the mission,
objectives and goals of the Company; and to enhance the Company's ability to
attract, retain and motivate the highest caliber senior executives. The purposes
of the Plan shall be carried out by payment to eligible participants of annual
incentive cash awards, subject to the terms and conditions of the Plan and the
discretion of the Compensation Committee of the board of directors of the
Company.
2. AUTHORIZATION.
On February 25, 1997, the Compensation Committee approved the Plan, which is
effective only with respect to the Plan Year.
3. SELECTION OF PARTICIPANTS.
Participants shall be selected by the Compensation Committee, with the advice of
the Chief Executive Officer, from among the full-time management employees of
the Company who serve in senior operational, administrative, professional or
technical capacities. The Chief Executive Officer shall not be eligible to
participate in the Plan.
4. PARTICIPANTS ADDED DURING PLAN YEAR.
A person selected for participation in the Plan after the beginning of the Plan
Year will be eligible to earn a prorated portion of the award the participant
might have otherwise earned for a full year's service under the Plan, provided
the participant is actively employed as a participant under the Plan for at
least 120 days during the Plan Year. The amount of the award, if any, earned by
such participant shall be conclusively determined by the Compensation Committee,
with the advice of the Chief Executive Officer, based on the
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number of full months of the Plan Year during which the employee participated in
the Plan and on such other criteria as the Compensation Committee deems
relevant.
5. DISQUALIFICATION FOR UNSATISFACTORY PERFORMANCE.
Any participant whose performance is found to be unsatisfactory or who shall
have violated in any material respect the Company's Policy on Ethical Business
Conduct shall not be eligible to receive an award under the Plan. Any
determination of unsatisfactory performance or of violation of the Company's
Policy on Ethical Business Conduct shall be made by the Chief Executive Officer.
Participants who are found ineligible due to unsatisfactory performance will be
so notified in writing prior to October 31, 1997.
6. TERMINATION OF EMPLOYMENT.
A participant whose employment is terminated voluntarily or involuntarily,
except by reason of death or voluntary retirement, prior to the end of the Plan
Year shall not be eligible to receive an award under the Plan. A participant who
voluntarily retires or the estate of a participant who dies during the Plan Year
will be eligible to receive a prorated portion of the award the participant
would have otherwise received for a full year's service under the Plan, provided
the participant is actively employed as a participant under the Plan for at
least 120 days during the Plan Year. The amount of any award payable to such
retired participant or the estate of such deceased participant shall be
conclusively determined by the Compensation Committee, with the advice of the
Chief Executive Officer, based on the number of full months of the Plan Year
during which the retired or deceased employee participated in the Plan and such
other criteria as the Compensation Committee may deem relevant. A participant
who has received or is receiving severance pay at the end of the Plan Year shall
be considered a terminated employee and shall not be eligible to receive an
award under the Plan.
7. AMOUNT OF AWARDS.
Participants are eligible to earn cash awards as specified by the Compensation
Committee, will approve each participant's target award amount.
The amount of the award, if any, earned by each participant shall be based on
achievement of EBIT and ASSET goals of a Business Unit or Corporate Staff EBIT
and Corporate ASSET goals or Corporate EBIT and Total Asset goals or defined
strategic business goals to be approved by the Chief Executive Officer prior to
March 30, 1997 and, under certain circumstances specified in this Section 7,
overall Corporate EBIT and Total ASSET goals. If the applicable minimum earnings
before interest and taxes and asset goals are achieved, then the amount of the
award earned by a participant shall be at least 30% of the target award. The
maximum award earned shall be three times the target award for all
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participants below the Executive Vice President grade and three and one-half
times for participants who are Executive Vice Presidents.
Subject to the limitations set forth in this Section 7, determination of awards
payable to participants (i) who are Business Unit Presidents will be based 50%
on Business Unit EBIT and ASSET goals ("Unit Goals"), 25% on Corporate EBIT and
Total ASSET goals ("Corporate Goals") and 25% on defined personal performance
plan strategic business goals ("Performance Plan Goals") agreed upon between the
Chief Executive Officer not later than March 31 of the Plan Year; (ii) who are
Business Unit participants will be based 75% on Unit Goals and 25% on
Performance Plan Goals; and (iii) who are Corporate staff participants will be
based 75% on Corporate Goals or 75% on Corporate Staff EBIT and Corporate Asset
goals ("Corporate Staff Goals") and 25% on Performance Plan Goals agreed upon
between the participant and the Chief Executive Officer not later than March 31
of the Plan Year.
The applicable Unit Goals, Corporate Goals, and Corporate Staff Goals shall be
specified as a range which will serve as the basis for determining the minimum
and maximum portion of a participant's award earned based on achievement of such
goals.
None of that portion of a participant's award based on achievement of
Performance Plan Goals shall be paid, unless some award on the applicable Unit
Goals or for corporate staff participants, Corporate Goals or Corporate Staff
Goals are payable to the participant; except that, upon recommendation of the
Chief Executive Officer, the Compensation Committee may approve payment of all
or a part of any portion of the award to the participant based on outstanding
individual performance or achievement of significant Performance Plan Goals,
notwithstanding the failure to achieve the Unit Goals, Corporate Goals, or
Corporate Staff Goals. Participants may earn a multiple of the Performance Plan
Goals at the same ratio earned for achievement of Unit Goals or Corporate Goals.
Unless otherwise directed by the Compensation Committee, the annual business
plan presented to the Company's board of directors for purposes of the Plan
shall be the principal factor considered by the Chief Executive Officer in
specifying the applicable financial goals. In order to fairly and equitably
reward outstanding performance, the Compensation Committee may adjust the
operating results of any Business Unit or of the Company for purposes of the
Plan to reflect unusual or nonrecurring charges or credits to income, changes in
accounting principles and other factors not taken into consideration in
establishing the applicable goals.
In the event of a significant change in the responsibilities and duties of a
participant during the Plan Year, the Chief Executive Officer shall have the
authority, in his sole discretion, to terminate the participant's participation
in the Plan, if such change results in diminished responsibilities, or to make
such changes as he deems appropriate in (i) the target award
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the participant is eligible to earn, (ii) the participant's applicable goal(s)
and (iii) the period during which the participant's applicable target award
applies.
8. PAYMENT OF AWARDS.
Any awards payable under the Plan (including awards with respect to participants
who die or voluntarily retire during the Plan Year) will be made in cash, net of
applicable withholding taxes, as soon as reasonably practicable after the end of
the Plan Year, but in no event prior to the date on which the Company's audited
financial statements for the Plan Year are reviewed by the audit committee of
the Company's board of directors.
9. PLAN ADMINISTRATION.
The Chief Executive Officer shall have final authority to interpret the
provisions of the Plan. Interpretations by the Chief Executive Officer which are
not patently inconsistent with the express provisions of the Plan shall be
conclusive and binding on all participants and their designated beneficiaries.
It is the responsibility of the Vice President Human Resources (i) to cause each
person selected to participate in the Plan to be furnished with a copy of the
Plan and to be notified in writing of such selection, the applicable goals and
the range of the awards for which the participant is eligible; (ii) to cause the
awards to be calculated in accordance with the Plan; and (iii) except to the
extent reserved to the Chief Executive Officer or the Compensation Committee
hereunder, to administer the Plan consistent with its express provisions.
10. NON-ASSIGNABILITY.
A participant may not at any time encumber, transfer, pledge or otherwise
dispose of or alienate any present or future right or expectancy that the
participant may have at any time to receive any payment under the Plan. Any
present or future right or expectancy to any such payment is non-assignable and
shall not be subject to execution, attachment or similar process.
11. MISCELLANEOUS.
Nothing in the Plan shall interfere with or limit in any way the right of the
Company to terminate any participant's employment or to change any participant's
duties and responsibilities, nor confer upon any participant the right to be
selected to participate in any incentive compensation plans for future years.
Neither the Chief Executive Officer, the Vice President Human Resources, nor the
Compensation Committee shall have any liability for any action taken or
determination made under the Plan in good faith.
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12. BINDING ON SUCCESSORS.
The obligations of the Company under the Plan shall be binding upon any
organization which shall succeed to all or substantially all of the assets of
the Company, and the term Company, whenever used in the Plan, shall mean and
include any such organization after the succession. If the subject matter of
this Section 12 is covered by a change-in-control agreement or similar agreement
which is more favorable to the participant than this Section 12, such other
agreement shall govern to the extent applicable and to the extent inconsistent
herewith.
13. DEFINITIONS.
"ASSET" means the average of all the assets employed in a particular Business
Unit during the Plan Year as reflected on the Company's books for internal
reporting purposes (including capitalized leased rights but excluding cash, land
and buildings), reduced by the amount of merchandise accounts payable for
purchases of inventory.
"BUSINESS UNIT" means any of the Company's business units or any combination of
two or more of the profit centers which comprise Genesco Inc.
The "CHIEF EXECUTIVE OFFICER" means the chairman, president and chief executive
officer of the Company.
The "COMPANY" means Genesco Inc.
The "COMPENSATION COMMITTEE" means the compensation committee of the board of
directors of the Company.
"CORPORATE ASSET" means the average of all the assets employed in Company's
continuing operations plus corporate staff departments during the Plan Year as
reflected on the Company's books for internal reporting purposes (including
capitalized leased rights but excluding cash, land and buildings), reduced by
the amount of merchandise accounts payable for purchases of inventory.
"CORPORATE EBIT" means net earnings plus interest and taxes of the Company for
the Plan Year determined in accordance with generally accepted accounting
principles as reported in the audited financial statements of the Company for
the Plan Year contained in the Company's report to shareholders for such Plan
Year as adjusted for any adjustments to strategic investments/expenditures for
the Business Units.
"CORPORATE STAFF EBIT" means pretax earnings of the continuing operations plus
interest of the Company for the Plan Year determined in accordance with
generally accepted
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accounting principles as adjusted for any adjustments to strategic
investments/expenditures for the Business Units.
"EBIT" of a Business Unit means pretax earnings before interest of such Business
Unit as determined for corporate internal reporting purposes decreasing EBIT for
strategic investments/expenditures that are below plan and increasing EBIT for
strategic investments/expenditures that are approved and that are above plan.
"THE "PLAN" means this Management Incentive Compensation Plan for the Plan Year.
"PLAN YEAR" means the fiscal year of the Company ending January 31, 1998.
"TOTAL ASSET" means the average of all assets less cash and accounts payable of
the Company during the Plan Year as reflected on the Company's books for
internal reporting purposes.
The "VICE PRESIDENT HUMAN RESOURCES" means the vice president Human Resources of
Genesco Inc.
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