EXHIBIT 10.8

 

Gray Television, Inc.

 

Description of Annual Incentive Plan Structure

 

The Compensation Committee (the “Committee”) of the board of directors of the
Company, has established an incentive compensation program that is designed to
provide opportunities for the Company’s executive officers to receive annual
cash incentive compensation awards based upon achieving certain pre-established
targets for Company performance. The target opportunities are based on the
achievement of certain performance metrics, and are generally established each
year as a percentage of each executive officer’s base salary. Such metrics may
vary from year to year, but are generally chosen from those the Committee deems
appropriate to motivate the Company’s executive officers towards the achievement
of performance objectives that are in the Company’s best interests, such as
revenues, “net operating profit” (calculated as net revenue less broadcast
expense and corporate and administrative expense) and/or broadcast cash flow (as
defined in the Non-GAAP reconciliations published by the Company). The incentive
opportunities generally range between a threshold of 17.5% and a maximum of 90%
of an executive officer’s base salary, depending on the level of satisfaction of
the relevant metrics.

 

As part of the annual incentive plan, the Committee generally establishes
threshold (minimum), target and maximum levels of performance for each metric,
with a weighting of the total incentive opportunity assigned to each of the
metrics as follows: (i) 25% for revenue goals, (ii) 25% for net operating profit
goals and (iii) 50% for broadcast cash flow goals. Target performance goals are
developed based on internal company budgets and forecasts. If actual Company
performance for any of the metrics above is less than 95% of the “target” amount
of such metrics, no payment would be made for that metric. If actual performance
is between 95% and 100% of target performance, awards would be paid on a scale
of 50% to 100% of each executive officer’s target opportunity. If actual
performance exceeds 100% and is less than or equal to 110% of target
performance, awards would be payable on a scale from 100% to 150% of an
executive officer’s target opportunity, in each case based on linear
interpolation of actual results. The maximum award payable for any single metric
is 150% of an executive officer’s target opportunity for that metric. If the
threshold measure is not achieved, then no payment would be made for the
associated metric.

 

The Committee reviews performance at the conclusion of each fiscal year and
determines the actual incentive payments earned based upon achieving the
relevant metrics. In addition, as a part of the incentive plan structure, the
Committee retains the discretion to adjust any amount that would have been
payable based on the achievement of the pre-established metrics, or to make
other discretionary cash bonus payments, in either case, based upon the
Company’s or an individual executive officer’s performance.