Exhibit 10.15
 
 
MEDICAL ACTION INDUSTRIES INC.
 
SUMMARY OF ANNUAL PERFORMANCE BASED BONUS PROGRAM

 
Medical Action Industries Inc. (the “Company”) has historically utilized an
annual cash bonus program based on the performance of the Company and the
participants.  The performance-based cash bonuses are generally available to
full-time employees holding key positions at the Company, which positions have
been selected by the Company’s most senior executives as a bonus eligible
position.  Employees are eligible to participate as soon as they are either
hired into or promoted to an eligible position (except where an eligible
employee starts in the last quarter of the fiscal year, such employee may only
participate beginning in the next year).

Each May, the Company’s Chief Executive Officer reviews with the Company’s
Compensation Committee (the “Compensation Committee”) the Company’s estimated
full-year financial results against the financial, strategic and operational
goals established for the year and the Company’s financial performance in prior
periods.  Based on that review, the Compensation Committee determines on a
preliminary basis an estimated appropriation to provide for the payment of cash
bonuses to full-time employees.

The Compensation Committee, with input from the Chief Executive Officer with
respect to the other executives, then uses its discretion in determining the
amount of cash bonus, within prescribed limits, that will be paid to each
participant shortly after the end of the fiscal year.  They evaluate (1) the
Company’s overall performance, (2) the performance of the business or function
that the executive leads, and (3) each executive’s individual performance
against previously established expectations for the year.  Regardless of the
Company’s performance or any particular executive’s performance with respect to
such criteria, the Compensation Committee retains full discretion over the
determination and the payment, if any, of the bonus that is deemed appropriate
in light of circumstances.

More specifically, each individual executive’s potential performance-based cash
bonus is calculated with respect to a target percentage of such individual’s
salary (“Target Payout Percentage”) as established in such individual’s plan
letter provided at the beginning of the fiscal year.  Payment of any
individual’s Target Payout Percentage is subject to the achievement of the
performance target objectives (“Performance Metrics”), which are selected and
approved by the Board of Directors of the Company (the “Board”) prior to the
start of each fiscal year.  The Board may also set ratios for each Performance
Metric (i.e., how much each metric is weighted against the others), target
achievement levels for each Performance Metric, and an overall hurdle that must
be achieved prior to any bonus being paid.  These Performance Metrics, along
with any ratios, targets, or hurdles the Board chooses to utilize in a given
year, are established after discussion with and recommendations by the Company’s
senior management and based on the objectives of the business plan for the next
year.

 
 

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After taking all of the above into consideration, the Compensation Committee has
the complete authority to increase or decrease the size of earned payouts based
on the Compensation Committee’s independent evaluation of Company and individual
performance, including but not limited to the discretion to award bonus amounts
to executive officers if the target Performance Metric(s) and individual or team
goals are not achieved.  Furthermore, the Compensation Committee may amend,
suspend or terminate the plan at any time, for any reason or no reason.