Exhibit 10.3
Charlie Tomm
2005 Platform CEO Compensation Plan
Goals:
o Accountability for the most important operating performance elements
managed by you
o Financial reward for successfully managing these elements
o Financially reward "recovery" results if the first half of the year is
less than par
2004 Compensation Elements
o Base Salary is $600,000 (This is an increase from 500,000)
o Total Par Bonus Percent is 80%
o Total Par Bonus Dollars are $480,000
o Annual Net Operating Income Bonus (70% of the total Par Bonus Dollars) is
$336,000
o Semi annual NOI Par Bonus is $168,000
o Annual Business Development Bonus (30% of the total Par Bonus Dollars) is
$144,000
Net Operating Income Bonus Formula (70% of the total Par Bonus)
The Bonus Plan is being divided into 2 half-year opportunities but will never
pay you less than an annual plan calculation. The approach provides you with the
opportunity to rebound from a disappointing first half with a new bonus
opportunity in the second half. The details are shown in the chart below.
- ------------------------------------ -----------------------------------------
The first half Bonus: Final year end Bonus (2)
- ------------------------------------ -----------------------------------------
If NOI Result: Using the first Final Payment Final Bonus payment
half bonus will be will be:
formula the Mid calculated: (1)
year payment
will be:
- ------------------------------------ -----------------------------------------
Meets or exceeds Par Bonus for Using the The annual calculation
Par the first 1/2 Annual Bonus less the par bonus
year calculation paid in the first half.
- ------------------------------------ -----------------------------------------
Between Threshold Actual first Second half Actual second half
and par half Bonus Bonus Formula Bonus.
This can pay up to 10%
more than the annual
Plan calculation
- ------------------------------------ -----------------------------------------
Below Threshold No Bonus Second half Actual second half
Bonus Formula Bonus.
Potential for
meaningful increase
over the annual plan
- ------------------------------------ -----------------------------------------
1. First 1/2 Payments are never forfeited
2. The annual Business Development bonus will be paid out with the
final Bonus payment
1
The Bonus targets and formulas for 2005 are detailed in the next 2 charts.
Annual Targets
- ----------------------------------------------------------------------------------------------------------------------
NOI
(% of
Level NOI Dollars Budget)(1) Bonus Dollars Annual Formula
- --------------------- ------------------- --------------- ------------------- ----------------------------------------
Threshold 47,300,000 90% $67,200 $67,200
- --------------------- ------------------- --------------- ------------------- ----------------------------------------
Par 52,500,000 100% $336,000 $67,200 Plus 5.1% of NOI over threshold
- --------------------- ------------------- --------------- ------------------- ----------------------------------------
Double 62,000,000 118% $672,000 $336,000 Plus 3.6% of NOI over Par
- --------------------- ------------------- --------------- ------------------- ----------------------------------------
(1) Intentionally Omitted
Semi Annual Targets (based upon your calendarized budgets)
- ----------------------------------------------------------------------------------------------------------------------
Level First Half NOI First Half Formula Second half NOI Second half Formula
Dollars Dollars
- ---------------- ----------------- ---------------------------- ----------------- ------------------------------------
Threshold 23,100,000 $33,600 24,100,000 $33,600
- ---------------- ----------------- ---------------------------- ----------------- ------------------------------------
Par 25,700,000 $33,600plus 5.2% of NOI in 26,800,000 $33,600 plus 5% of NOI in excess
excess of the threshold of the threshold
- ---------------- ----------------- ---------------------------- ----------------- ------------------------------------
Double 30,300,000 $168,000 Plus 3.6% of NOI 31,600,000 $168,000 Plus 3.5% of NOI in
in excess of Par excess of Par
- ---------------- ----------------- ---------------------------- ----------------- ------------------------------------
Business Development Objectives Bonus (30% of the total Par Bonus)
o Goals/metrics for each of the objectives, addressing the specific
challenges, are set at the beginning of the year. The categories are
detailed below.
o Regular reviews with Ken Gilman to evaluate YTD performance against these
objectives. The metrics will facilitate a fact-based discussion.
o Final review with Ken Gilman at the end of the year to establish year- end
payout. The payout will not be based upon a numerical calculation, rather a
subjective evaluation of the Business Development topics in the below table
(including related metrics).
o Payout range 0% to 200% of the Par.
- --------------- --------------- ------------------------- -------------------
Frame work
Agreement General Manager
Compliance Success Productivity Pre-owned Vehicles
- --------------- --------------- ------------------------- -------------------
Toyota, Honda, Market Share Total platform personnel Used Car Inventory
GM,Nissan expense (including "core" percent
- --------------- --------------- management co.) as a % total.
Unit sales for GM Turnover of total gross: Evaluated Goal is 65%
all but Honda versus budget and trend
- --------------- --------------- to prior years'
CSI for Honda Management performance
Turnover
- --------------- --------------- ------------------------- -------------------
2
Tuck-in Acquisition Bonus
o 12-month measurement period using NOI vs. the deal pro-forma
o 3-month grace period (longer periods may be set when the pro-forma is
created)
o Team Bonus- For team members who helped with integration- 20% of CEO bonus
o Payout scale- see table below
- ------------------------------------------------------------------
Franchise bonus %
----------------------------------
Actual NOI vs. Pro-forma Non-Targeted Targeted*
- ------------------------------------------------------------------
% % Of NOI % Of NOI
- ------------------------------------------------------------------
80%- 99% 2% 4%
100%- 109% 3% 5%
110%-119% 4% 6%
120% and up 5% 7%
- ------------------------------------------------------------------
*Acura, BMW, Honda, Lexus, Mercedes Benz, Toyota, Nissan