EXHIBIT 10.3

 

Summary of Executive Bonus Plan

 

On August 21, 2009, the Compensation Committee of our Board of Directors adopted
a new executive bonus plan for our eligible executive officers to be effective
for the quarterly periods ending September 30, 2009 and December 31, 2009 in
replacement of a prior executive bonus plan, previously adopted on February 29,
2005, as amended on January 1, 2008. The new plan was adopted by the
Compensation Committee after consideration by the Committee of our compensation
philosophies, principles and processes as described in our Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2008 filed with the
Securities and Exchange Commission on April 30, 2009. These philosophies,
principles and processes provide for periodic review by the Committee of the
performance of our executive officers, the components of their compensation and
the effectiveness of our compensation programs in rewarding the contributions of
our executive officers towards enhancing our specific business goals while
retaining and motivating high quality individuals. In adopting the new executive
bonus plan for the third and fourth quarters of 2009, the Committee considered
the changed economic environment under which the Company has been operating and
continues to operate together with recent competitive market data and the
executive compensation report provided to the Committee in December 2007 by its
independent compensation advisors, Towers Perrin.

 

Under the new executive bonus plan, each of our eligible executive officers are
eligible to receive the following for the quarterly periods ending September 30,
2009 and December 31, 2009: (i) a quarterly bonus for each of Frank F. Khulusi,
President and Chief Executive Officer, Brandon H. LaVerne, Chief Financial
Officer, Kristin M. Rogers, Executive Vice President — Sales and Marketing and
Daniel J. DeVries, Executive Vice President — Consumer, computed at the
percentages set forth in the table below of the company’s consolidated adjusted
pre-tax income for such quarter, subject to such consolidated adjusted pre-tax
income being equal to or greater than two thirds of a pre-determined targeted
adjusted pre-tax income for such quarter and (ii) an additional quarterly bonus
of for the foregoing executive officers in the amounts set forth in the table
below if the company’s quarterly adjusted income achieved for each of the bonus
periods discussed above is greater than a pre-determined targeted adjusted
pre-tax income for such quarter. For purposes of the executive bonus plan,
“adjusted pre-tax income” is defined as the Company’s consolidated pre-tax
income for the applicable quarter, less certain costs that are excluded from the
calculation on a quarterly basis by the Compensation Committee in its sole
discretion.  In addition to participation in the executive bonus plan, as
described above, all of our executive officers are eligible for discretionary
bonuses as determined from time to time by our Compensation Committee.

 

The maximum participation percentage and additional quarterly bonus for our
executive officers currently eligible to participate in the plan is as follows:

 

PLAN PARTICIPANT

 

Maximum
Percentage
Participation In
Quarterly Bonus

 

Maximum
Additional
Quarterly Bonus

 

 

 

 

 

 

 

Frank F. Khulusi
President and Chief Executive Officer

 

3.8

%

$

95,000

 

 

 

 

 

 

 

Brandon H. LaVerne
Chief Financial Officer

 

1.2

%

$

30,000

 

 

 

 

 

 

 

Kristin M. Rogers
Executive Vice President—Sales and Marketing

 

1.2

%

$

30,000

 

 

 

 

 

 

 

Daniel J. DeVries
Executive Vice President—Consumer

 

1.2

%

$

30,000

 

 

The Compensation Committee may amend the foregoing percentages and amounts from
time to time in its sole discretion. In addition, the Compensation Committee may
in its sole discretion reduce the amounts that would otherwise be payable to any
participant for any period (including a complete elimination of all amounts
identified under the table above for the period). Any such reduction may be
based on quantitative or qualitative factors determined in the discretion of the
Compensation Committee.

 

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