EXHIBIT 10.1
BALDWIN TECHNOLOGY COMPANY, INC.
MANAGEMENT INCENTIVE COMPENSATION PLAN
(as approved August 17, 2006)
I Objective
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The purpose of the Baldwin Technology Company, Inc. (the "Company" or
"Baldwin") Management Incentive Compensation Plan ("MICP" or the "Plan") is
to provide a financial incentive (bonus) to key Baldwin employees around
the world to work together for the common good of the Company as the
Company pursues it strategic business initiatives.
II MICP Criteria and Implementation
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A) The MICP is designed to encourage participants to work together and
cooperate with one another for the overall benefit of Baldwin. It is
also designed to recognize, motivate, and reward participants for
their efforts and contributions on a business unit as well as a
corporate basis.
B) Participants are eligible to participate in the MICP at a target bonus
percentage of his/her base salary in effect on July 1st of any given
fiscal year. This percentage, when multiplied with the participant's
base salary, is his/her 100% bonus opportunity. There are currently
seven bonus percentage classifications ranging from 7.5% to 50%.
C) Performance against each MICP target for both corporate and the
business units will be measured on a sliding scale that equates 90%
achievement of each fiscal year Annual Operating Plan ("AOP") MICP
target to a zero percent (0%) bonus and 100% achievement of each
fiscal year AOP MICP target to a one-hundred percent (100%) bonus. In
other words, there will not be any bonus for achieving 90% or less of
a fiscal year AOP MICP target, and there will be a one-hundred percent
(100%) bonus opportunity for achieving 100% of a fiscal year AOP MICP
target. The sliding scale means that ninety-five percent (95%)
achievement of each fiscal year AOP MICP target equates to a fifty
percent (50%) bonus opportunity. Note that in all cases the expense of
the bonus to be paid has to be included in the operating expenses in
determining whether or not the target has been achieved.
D) One-half (50%) of each participant's 100% bonus opportunity will come
from corporate (Baldwin Technology Company, Inc.) upon its achievement
of its fiscal year AOP MICP targets, and one-half (50%) of each
participant's 100% bonus opportunity will come from the participant's
business unit upon its achievement of its fiscal year AOP MICP
targets.
E) The fiscal year AOP MICP targets will be based on achieving the fiscal
year AOP year-end Profit Before Tax and achieving the fiscal year AOP
Accounts Receivable Aging (DSO), and fiscal year AOP year end
Inventory Turns.
F) To the extent that corporate or the region/business unit exceeds the
fiscal year AOP Profit Before Tax MICP target by 0% to 20%, then
provisions have been made to increase the 100% bonus opportunity on a
sliding scale by an additional zero percent (0%) to fifty percent
(50%). The maximum bonus opportunity is capped at one hundred fifty
percent (150%) (1.5 times the 100% bonus percentage). The following
chart illustrates bonus opportunities with various achievement levels
against fiscal year Profit Before Tax AOP MICP target.
Achievement Against Percent of Bonus
AOP PBT MICP Target Opportunity
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90% or Less 0%
95% 50%
100% 100%
110% 125%
120% 150%
130% 150%
G) To the extent that corporate or the region/business unit exceeds the
fiscal year year-end DSOs and fiscal year year-end Inventory Turns
MICP targets by 0% to 15%, then provisions have been made to increase
the 100% bonus opportunity on a sliding scale by an additional zero
percent (0%) to fifty percent (50%). The maximum bonus opportunity is
capped at one hundred fifty percent (150%) (1.5 times the 100% bonus
percentage). The following chart illustrates bonus opportunities with
various achievement levels against fiscal year AOP DSOs and Inventory
Turns AOP MICP targets.
Achievement Against Percent of Bonus
AOP DSO & DOI MICP Target Opportunity
------------------------- -----------
90% or less 0%
95% 50%
100% 100%
107.5% 125%
115% 150%
120% 150%
H) The calculations for corporate and region/business unit MICP bonuses
is independent of one another as are the calculations for the
percentage achievement against each fiscal year AOP MICP target. This
means that there are a total of six (6) independent calculations
associated with each bonus (except corporate, which has three (3)
independent calculations). In both the corporate and region/business
unit calculations, the fiscal year AOP Profit Before Taxes will be
weighted at 80%, while DSOs and Inventory Turns will be weighted at
10% each.
III MICP Fiscal Year Targets
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A) The MICP provides that each eligible participant earn a bonus upon the
achievement of certain MICP performance targets. (The types of targets
are the same for both corporate and the region/business units). Both
corporate and the region/business units have three quantitative
performance objectives whose purpose is to focus the Company's
attention on earnings (through the Profit Before Tax) and on cash
(through an improvement in managing the Company's balance sheet assets
of Accounts Receivable and Inventory).
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IV Administrative
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A) New Participants
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Any newly hired, promoted or transferred employee who was not in the
Plan and now becomes eligible as a result of being newly hired,
promoted or transferred to participate in the MICP will do so on a
pro-rated basis from the date of such occurrence. All new participants
must be approved by the President & COO and Chief Financial Officer of
the Company.
B) Termination, Retirement or Death
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A participant who terminates voluntarily or is terminated for just
cause (or summary dismissal) prior to a payout of any bonus under this
Plan as outlined in Section IV (D) below, will not receive payment
under this Plan. In the case of retirement or death of a participant
before the fiscal year-end of the bonus plan year, payment will be
made on a pro-rated basis consistent with the time such employee
worked in the fiscal year.
C) Payout
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At fiscal year-end, actual financial performance results will be
compared to the performance criteria and the payout for each
participant will be calculated using the foreign exchange rate in
effect on June 30th of that fiscal year. Any payout from the Plan will
occur no later than the first pay period after August 31st following
the end of the fiscal year.
D) Plan Changes
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Unless otherwise stipulated in a participant's employment agreement
(which employment agreement has been approved by the Compensation
Committee of the Board of Directors of the Company), all information
contained herein including the MICP targets and the payout of bonuses
(either as a whole or individually) under this Plan may be changed as
considered appropriate (for matters such as acquisitions, etc.) at the
sole discretion of the Baldwin Executive Team (BET) of the Company,
provided that the changes to the Plan must be approved by the
Compensation Committee of the Board of Directors of the Company.
E) Change of Control
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In the event of involuntary separation of a participant within ninety
(90) days of a Change of Control in the Company's ownership, then
payment will be made on a pro-rata basis consistent with the time such
participant worked during the fiscal year.
F) Authorized Bonus Plan
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This Plan is the Company's only authorized bonus plan. To the extent
that there are other bonus plans or agreements to pay an employee a
bonus based on corporate, business unit, personal, etc. performance,
this information is to be brought to the attention of the Company. The
Company will then work with the appropriate individuals to phase out
and terminate those plans and/or arrangements and incorporate them
into the MICP if appropriate.
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