Exhibit 10.17
LUMINANT WORLDWIDE CORPORATION
SENIOR BONUS PLAN
PURPOSE Luminant Worldwide Corporation, a Delaware corporation (the
"COMPANY"), wishes to motivate, reward, and retain key senior
executives of the Company and its subsidiaries. To further these
objectives, the Company hereby sets forth this Luminant Worldwide
Corporation Senior Bonus Plan (the "PLAN"), effective as of August
6, 1999, to provide participants with incentives ("INDIVIDUAL
AWARD OPPORTUNITIES") to earn performance-based bonus awards
("AWARDS"), in accordance with Section 162(m) ("SECTION 162(m)")
of the Internal Revenue Code of 1986 (the "CODE"). (All references
to "Section 162(m)" or any other Code provision include successor
provisions, related regulations, and amendments.)
PARTICIPANTS During each Performance Period, the Committee may designate some
or all of the Executive Officers of the Company (including those
of any subsidiary, operating unit, or division) as eligible for
Individual Award Opportunities under this Plan. "PARTICIPANTS" are
persons the Committee designates who have not been paid all
amounts, if any, due them under the Plan. Eligible Executive
Officers are Participants only with respect to Performance Periods
for which the Committee designates them for participation under
the Plan.
"EXECUTIVE OFFICER" has the meaning set forth in Rule 3b-7 issued under
the Securities Exchange Act of 1934, each as amended from time to time,
and anyone else the Committee determines to treat as an Executive
Officer for purposes of this Plan.
ADMINISTRATOR The Plan's Administrator will be a committee (the "COMMITTEE") of
the Company's Board of Directors (the "BOARD") designated by the
Board to be responsible for administering and interpreting the
Plan. The Committee will include two or more directors, each of
whom qualifies as an "outside director" within the meaning of
Section 162(m), and those outside directors will have exclusive
authority under this Plan to make Awards and establish and
determine satisfaction of Performance Goals. The Committee may
satisfy this requirement through (i) providing that persons who
are not "outside directors" cannot vote on an issue, (ii) allowing
those persons to abstain from voting, or (iii) creating a
subcommittee of qualifying outside directors to take action with
respect to this Plan. If a Committee member intended to qualify as
an outside director does not in fact so qualify, the mere fact of
such nonqualification will not invalidate the payment of any
- -------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 1 of 10
Award or other action by the Committee under the Plan that was
otherwise valid under the Plan.
The Committee is responsible for the general operation and
administration of the Plan and for carrying out its provisions and has
full discretion in interpreting and administering the provisions of the
Plan. Subject to the express provisions of the Plan, the Committee may
exercise such powers and authority of the Board as the Committee may
find necessary or appropriate to carry out its functions. The Committee
will exercise its powers under the Plan in a manner that preserves the
Company's Federal income tax deduction for payments made under the
Plan, in accordance with the requirements of Section 162(m), to the
maximum practical extent.
GENERAL Subject to the terms of the Plan and after taking into
RESPONSIBILITIES account the recommendations of the Company's Chief Executive
OF THE Officer,for each Performance Period the Committee will:
COMMITTEE
determine any bonus pool award opportunities available,
designate the Executive Officers who will be Participants in the
Plan,
establish each Participant's Individual Award Opportunity,
define Performance Goals and other Award terms and conditions for
each Participant,
determine and certify the Award amounts earned, based on actual
performance as compared to the Performance Goals,
determine and make permitted Negative Discretion Adjustments to
Awards otherwise earned, and
decide whether, under what circumstances, and subject to what
terms, Awards will be paid on a deferred basis (including
automatic deferrals at the Committee's election or elective
deferrals at the election of Participants).
Unless the Plan otherwise expressly provides, all designations,
determinations, interpretations, and other decisions made under or with
respect to the Plan and all Awards made under the Plan are within the
sole and absolute discretion of the Committee and will be final,
conclusive and binding on all persons, including the Company,
Participants, and Beneficiaries or other persons having or claiming any
rights under the Plan.
- -------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 2 of 10
PARTICIPANT The Committee will designate the Participants in the Plan for each
DESIGNATIONS Performance Period within the Applicable Period, and with
reference to the fiscal year for which the Company would be
entitled to a Federal tax deduction for payment of Awards in
respect of the Performance Period (the "DEDUCTION YEAR"). The
Committee will make its designations primarily by taking into
account which Executive Officers:
are likely to be Executive Officers of the Company as of the last
day of the Deduction Year,
are reasonably expected to have individual compensation for the
Deduction Year that may be in excess of $1 million, not including
compensation that is excluded under Section 162(m) as payable
under a "performance based" plan other than this Plan, and
are reasonably expected to be "covered employees" for the
Deduction Year for purposes of Section 162(m).
The Committee may also take into consideration other factors that it
deems appropriate.
INDIVIDUAL INDIVIDUAL AWARD OPPORTUNITY means a Participant's opportunity to
AWARD earn an Award for a given Performance Period, based on the
OPPORTUNITIES achievement of the Participant's Performance Goals. The Committee
will establish each Participant's Individual Award Opportunity,
within the Applicable Period, for each Performance Period.
An Individual Award Opportunity may be expressed in dollars or may be
based on a formula that is consistent with the provisions of the Plan.
If Individual Award Opportunities are expressed in terms of shares of
any bonus pool, the shares of such bonus pool designated for Individual
Award Opportunities may not exceed 100% of the pool for any Performance
Period.
PERFORMANCE The Committee will, within the Applicable Period, set one or more
GOALS PERFORMANCE GOALS for a Performance Period for each Participant,
and/or each group of Participants, and/or each bonus pool (if any).
Performance
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 3 of 10
Goals will be based exclusively on one or more of the following
corporate-wide or parent, subsidiary, division, or operating unit
financial measures:
pretax or after tax net income,
operating income,
gross revenue,
profit margin,
stock price,
cash flow(s),
strategic business criteria, consisting of
one or more objectives based on meeting
specified revenue, market penetration,
geographic business expansion goals, cost
targets, and goals relating to acquisitions
or divestitures,
or any combination of these measures (in each
case before or after such objective income
and expense allocations or adjustments as the
Committee may specify within the Applicable
Period).
Each Performance Goal may be expressed in absolute and/or relative
terms, may be based on or use comparisons with current internal
targets, the past performance of the Company (including the
performance of one or more subsidiaries, divisions and/or
operating units) and/or the past or current performance of other
companies. In the case of earnings-based measures, Performance
Goals may use comparisons relating to capital (including, but
limited to, the cost of capital), shareholders' equity and/or
shares outstanding, or to assets or net assets.
In all cases, Performance Goals are to be set in a manner that
will satisfy any applicable requirements under Treas. Reg. Sec.
1.162-27(e)(2) (as amended from time to time). Such requirements
include requirements that achieving Performance Goals be
'substantially uncertain' at the time that they are established,
that Performance Goals be defined in such a way that a third party
with knowledge of the relevant facts could determine whether and
to what extent the Goals have been met, and such a third party
could determine the maximum amount of the resulting Award payable
(subject to the Committee's right to make Negative Discretion
Adjustments).
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 4 of 10
The measures used in setting Performance Goals under the Plan for
any given Performance Period will be determined in accordance with
generally accepted accounting principles ("GAAP") and in a manner
consistent with the methods used in the Company's audited
financial statements, without regard to (i) extraordinary items as
determined by the Company's independent public accountants in
accordance with GAAP, (ii) changes in accounting, unless, in each
case, the Committee decides otherwise within the Applicable
Period, or (iii) nonrecurring acquisition expenses and
restructuring charges.
PAYMENT Subject to the limitations set forth in this section, Awards
OF AWARDS determined under the Plan for a Performance Period will be paid to
Participants in cash or, if the Company's equity plans permit, in
shares of Company stock or other equity based awards. Awards will
be paid as soon as practicable following the end of the
Performance Period to which the Awards apply.
CERTIFICATION No Award will be paid unless and until the Committee,
based on the Company's audited financial results for
such Performance Period (as prepared and reviewed by
the Company's independent public accountants), has
certified in the manner prescribed under applicable
regulations the extent to which the Performance
Goals for the Performance Period have been satisfied
and has made its decisions regarding the extent of
any Negative Discretion Adjustment of Awards.
DEFERRAL The Committee may specify that a portion of the Award
for any given Performance Period will be paid on a
deferred basis, in accordance with any Award payment
rules the Committee may establish and announce for
the Performance Period.
CONTINUED The Committee may require that Participants for a
EMPLOYMENT Performance Period must still be employed as of end
of the Performance Period and/or as of the later
date that the Awards for the Performance Period are
announced to be eligible for an Award for the
Performance Period. Any such requirement must be
established and announced within the Applicable
Period, and may be subject to such exceptions as the
Committee may specify within the Applicable Period.
PERFORMANCE A PERFORMANCE PERIOD is a period for which Performance Goals
PERIOD are set and during which performance is to be measured to
determine whether a Participant is entitled to payment of an Award
under the Plan. A Performance Period may coincide with one or more
complete or partial fiscal years of the Company.
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 5 of 10
APPLICABLE The APPLICABLE PERIOD with respect to any Performance Period means
PERIOD a period beginning on or before the first day of the Performance
Period and ending no later than the earlier of (i) the 90th day of
the Performance Period or (ii) the date on which 25% of the
Performance Period has been completed.
Any action required under the Plan to be taken within the
Applicable Period may be taken at a later date only if the
provisions of Section 162(m) or the regulations thereunder are
modified, or are interpreted by the Internal Revenue Service, to
permit such later date. In such event, the definition of the
Applicable Period under this Plan will be deemed to be amended
accordingly.
FORFEITURE Within the Applicable Period and subject to the Committee
OR PRORATION certification required for payment of Awards, the Committee
may adopt such forfeiture, proration, or other rules as it deems
appropriate, in its sole and absolute discretion, regarding the
impact on Awards of (i) a Participant's death, Disability,
voluntary termination of employment, termination of employment by
the Company and its subsidiaries other than for Cause, or
termination of employment by the Company and its subsidiaries for
Cause, or (ii) a Change of Control.
EMPLOYMENT "TERMINATION OF EMPLOYMENT" means the time when the
TERMINATION employer-employee or other service-providing
relationship between the Participant and the Company
and its subsidiaries ends for any reason. The
Committee, in its sole discretion, will determine
all questions of whether particular terminations or
leaves of absence are terminations of employment.
DISABILITY "DISABILITY" means 'disability' as defined in any
employment agreement then in effect between the
Participant and the Company or, if not defined in
that agreement or if there is no such agreement, as
defined in the Company's long-term disability plan
as in effect from time to time, or if there is no
plan or if not defined therein, the Participant's
physical or mental incapacity and consequent
inability for a period of 120 days in any twelve
consecutive month period to perform his duties to
the Company.
CAUSE 'CAUSE' means 'cause' as defined in any employment
agreement then in effect between the Participant and
the Company or if not defined in such an agreement
or, if there is no such agreement, where the
Participant:
commits any act of fraud, willful misconduct, or
dishonesty in connection with his employment or that
injures the Company or its direct or indirect
subsidiaries;
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 6 of 10
breaches any other material provision of any
agreement between the Participant and the Company or
a subsidiary of the Company relating to the
Participant's employment or breaches any fiduciary
duty to the Company or its direct or indirect
subsidiaries;
fails, refuses, or neglects to timely perform any
material duty or obligation relating to his
position;
commits a material violation of any law, rule,
regulation, or bylaw of any governmental authority
(state, Federal, or foreign), any securities
exchange or association or other regulatory or self
regulatory body or agency applicable to the Company
or its direct or indirect subsidiaries;
commits a material violation of any general policy
or directive of the Company or its direct or
indirect subsidiaries communicated in writing to the
Participant; or
is charged with a crime involving dishonesty, fraud,
or unethical business conduct, or a felony.
CHANGE OF "CHANGE OF CONTROL" has the same meaning as set
CONTROL 1999 forth in the Company's Long-Term Incentive
Plan, as amended from time to time.
LIMITATION ON Notwithstanding any other provision of this Plan,
AWARDS the maximum Award payable under the Plan to any
individual Participant in any single calendar year
will be $3 million.
NEGATIVE The Committee's powers include the power to make
DISCRETION NEGATIVE DISCRETION ADJUSTMENTS, which are
ADJUSTMENTS adjustments that eliminate or reduce (but not
increase) an Award otherwise payable to a
Participant for a Performance Period. No Negative
Discretion Adjustment may cause an Award to fail to
qualify as "performance based compensation" under
Section 162(m).
OTHER A Participant in this Plan may not also participate
PLANS in the Company's general bonus plans during
any Performance Period for which such participation
would cause an Award under this Plan to fail to
qualify as "performance based" under Section 162(m).
Awards will not be treated as compensation for
purposes of any other compensation or benefit plan,
program, or arrangement of the Company or any
subsidiary unless and except to the extent that the
Board or the Committee determines in writing.
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 7 of 10
Neither the adoption of this Plan nor the submission
of the Plan to the Company's shareholders for
approval will be construed as limiting the power of
the Board or the Committee to adopt such other
incentive arrangements as either may otherwise deem
appropriate.
LEGAL The Company will not make payments of Awards until
COMPLIANCE all applicable requirements imposed by Federal
and state laws, rules, and regulations, and by
any applicable regulatory agencies, have been
fully met. No provision in the Plan or action
taken under it authorizes any action that
Federal or state laws otherwise prohibit.
The Plan is intended to conform with all provisions
of Section 162(m) and Treas. Reg. ss. 1.162-27 to
the extent necessary to allow the Company a Federal
income tax deduction for Awards as "qualified
performance based compensation."
Notwithstanding anything in the Plan to the
contrary, the Committee must administer the Plan,
and Awards may be granted and paid, only in a manner
that conforms to such laws, rules, and regulations.
To the extent permitted by applicable law, the Plan
will be treated as amended to the extent necessary
to conform to such laws, rules, and regulations.
TAX WITHHOLDING The Company may make all appropriate provisions for
the withholding of Federal, state, and local taxes
imposed with respect to Awards, which provisions may
vary with the time and manner of payment.
NONTRANSFER Except as and to the extent the law requires,
OF RIGHTS or as the Plan expressly provides, a Participant's
rights under the Plan may not be assigned,
pledged, or otherwise transferred in any way,
whether by operation of law or otherwise or
through any legal or equitable proceedings
(including bankruptcy), by the Participant to
any person.
BENEFICIARY Each Participant may designate in a written form
DESIGNATIONS filed with the Committee (or another designated
recipipient) the person or persons (the
"BENEFICIARY" or "BENEFICIARIES") to receive
the amounts (if any) payable under the Plan if
the Participant dies before the Award payment
date for a Performance Period. A Beneficiary
designation filed under this section will not
be considered a prohibited transfer of rights.
A Participant may change a Beneficiary designation
at any time without the Beneficiary's consent
(unless otherwise required by law) by filing a new
written Beneficiary designation with the Committee.
A Beneficiary designation will be
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 8 of 10
effective only if the Company is in receipt of the
designation before the Participant's death.
If no effective Beneficiary designation is made, the
beneficiary of any amounts due will be the
Participant's estate.
AMENDMENT OR Subject to the limitations set forth in this
TERMINATION section, the Board may amend, suspend, or
terminate the Plan at any time, without the consent
of the OF PLAN Participants or their Beneficiaries.
Without the Participant's written consent, no
amendment or termination may materially adversely
affect the Award rights (if any) of any already
designated Participant for a given Performance
Period once the Committee has announced the
Participant designations and Performance Goals for
such Performance Period.
The Board or the Committee may make any amendments
necessary to comply with applicable regulatory
requirements, including Section 162(m) and
regulations thereunder.
The Board must submit any Plan amendment to the
Company's shareholders for their approval if and to
the extent such approval is required under Section
162(m).
LIMITATIONS ON No member of the Committee and no other individual
LIABILITY acting as a director, officer, other employee or
agent of the Company will be liable to any
Participant, former Participant, spouse,
Beneficiary, or any other person for any
claim, loss, liability, or expense incurred in
connection with the Plan. No member of the
Committee will be liable for any action or
determination (including, but limited to, any
decision not to act) made in good faith with
respect to the Plan or any Award under the
Plan. If a Committee member intended to
qualify as an 'outside director' under Section
162(m) does not in fact so qualify, the mere
fact of such nonqualification will not
invalidate any award or other action made by
the Committee under the Plan that otherwise
was validly made under the Plan.
The Company will indemnify and hold harmless each
member of the Committee, director, officer, other
employee, or agent of the Company to whom it or
another has delegated or does delegate any duty or
power relating to the administration or
interpretation of the Plan, against any cost or
expense (including attorneys' fees) or liability
(including any sum paid in settlement of a claim
with the Board's approval) arising out of any act or
omission to act concerning this Plan unless arising
out of such person's own fraud or bad faith.
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 9 of 10
NO EMPLOYMENT Nothing contained in this Plan constitutes an
CONTRACT employment contract between the Company and the
Participants. The Plan does not give any Participant
any right to be retained in the Company's employ,
nor does it enlarge or diminish the Company's right
to end the Participant's employment or other
relationship with the Company.
APPLICABLE LAW The laws of the State of Delaware (other than
its choice of law provisions) govern this Plan and
its interpretation.
DURATION OF The Plan will remain effective until terminated by
THE PLAN the Board, provided, however, that the continued
effectiveness of the Plan will be subject to the
approval of the Company's shareholders at such times
and in such manner as Section 162(m) may require.
DISCLOSURE AND The Plan must be submitted to Company shareholders
APPROVAL OF for their approval. The specific terms of the Plan,
including the class of employees eligible to THE
PLAN be Participants, the Performance Goals, and the
terms of payment of Awards, must be disclosed to the
shareholders to the extent Section 162(m) requires.
The shareholders must approve the Plan by a separate
vote after such disclosure. If the shareholders do
not approve the Plan, the Plan will be treated as
void and of no effect.
- --------------------------------------------------------------------------------
Luminant Worldwide Corporation
Senior Bonus Plan
Page 10 of 10