Exhibit 10.2
PERFORMANCE BASED LONG TERM EXECUTIVE INCENTIVE RESTRICTED STOCK GRANTS
“On June 14, 2011, the Board of Directors approved the award of Restricted Stock
Units (“Awards”) tied to the long-term performance of the Company. These Awards
are designed to further tie executive compensation to long term profitability
growth. These performance based Restricted Stock Units are granted to senior
management, including Named Executive Officers and other eligible Key Employees,
under the Company’s 1994 Stock Incentive Plan as amended. The 2011 Long Term
Incentive Awards are intended to place additional emphasis on creating long-term
shareholder value and strengthen the link between executive compensation and the
achievement of long-term financial objectives.
The Awards are divided into two long-term incentive components, LTI “A” and LTI
“B”, and eligible participants may potentially participate in one, or both
components at the discretion of the Board of Directors and the Compensation
Committee. A list of participants will be approved by the Board of Directors
each year, and all past participants must re-qualify each year.
The LTI “A” Award provides selected participants who achieve at least 100% of
their financial and personal performance objectives the opportunity to forego up
to 25% of their achieved target performance based annual cash incentive award in
exchange for deferred compensation units equal in value to 50% of their achieved
target performance based annual cash incentive award. If the eligible
participant accepts the opportunity, they will be paid 75% of their achieved
target performance based cash incentive award, and the Company will convert the
deferred compensation units into a Restricted Stock Unit Award of the same
value. The Restricted Stock Unit Award will vest at the rate of 25% per year on
the first through fourth anniversaries of the grant date.
The LTI “B” Award allows the Board of Directors, in their sole discretion, to
award grants of performance based Restricted Stock (or Deferred Compensation or
Restricted Stock Units) to Key Employees on an annual or other periodic basis
when the Company has achieved at least 100% of the Board approved financial plan
in the prior year. Management will present their recommendations for grant
awards to eligible participants at the annual Compensation Committee Meeting in
March. Eligible participants must participate in the LTI “A” program to be
considered for participation in the LTI “B” program. Awards granted become
eligible for vesting at the rate of 12.5% each year, with eligibility for
vesting contingent upon achieving annual Earnings per Share (EPS) targets set by
the Board of Directors at the time the Restricted Stock Units are granted. Up to
50% of the total award will vest on the fourth anniversary of the grant date,
and an additional 12.5% will vest on each subsequent anniversary date (years 5
through 8 from the grant date) if annual EPS targets are achieved. For any year
an annual EPS target is not met, vesting eligibility for the 12.5% of
shares/units applicable to that year will not occur, however, a one year
“catch-up” provision will apply. If the subsequent year’s EPS target is
achieved, both the previous year’s 12.5% and the current year’s 12.5% will
become eligible for vesting. All unvested Restricted Stock Units are forfeited
if the executive leaves the company under any unapproved conditions.