Exhibit 10.19
Summary of 2009 and 2010 Cash Incentive Programs
The Company’s Compensation Committee established a 2009 Cash Incentive Program
and 2010 Cash Incentive Program for the named executive officers, which includes
award targets granted under the Company’s Management Incentive Plan, with
respect to incentive bonuses to be earned for fiscal year 2009 and 2010,
respectively. The Management Incentive Plan permits the Company to pay incentive
bonuses that meet the requirements for performance-based compensation within the
meaning of Section 162(m) of the Internal Revenue Code. Under these programs,
each named executive officer is notified by the Company of the percentage of
that participant’s base salary up to which that participant is eligible to earn
as a maximum award and the goals which must be achieved to be eligible to
receive a payment under the applicable program. For each of fiscal year 2009 and
2010, Mr. Black is eligible to receive an award of up to 200% of his base salary
and Messrs. Ullman, Hensley, Merry and Thorne are each eligible to receive an
award of up to 65% of their respective base salaries.
The performance goals under each of the 2009 Cash Incentive Program and 2010
Cash Incentive Program are based upon the Company earning net income within or
above a specified range (the “Eligibility Range”) for the applicable program.
With respect to the named executive officers other than the Chief Executive
Officer, the following “personal” goals may also be considered and utilized by
the Compensation Committee in its exercise of negative discretion in reducing
the amount of an award that would otherwise be paid as a result of the level of
the net income achieved by the Company: (i) the participant receiving an overall
job performance rating of “Effective” or better (the equivalent of 3 out of 5);
(ii) the participant complying with the Company’s Code of Conduct, Associate
Manual and other rules, regulations and policies and not engaging in any
dishonest acts or other acts that are or may be detrimental to customers, fellow
associates or the Company; and (iii) attainment of specific goals for
departmental or individual performance. For purposes of the 2009 Cash Incentive
Program and 2010 Cash Incentive Program, “net income” is the reported net income
of the Company for the relevant fiscal year and is therefore determined after
deduction for all incentive plan and other compensation expenses. If the
Company’s net income is below the Eligibility Range for the particular program,
an award payment may not be authorized. If the Company’s net income is within
the Eligibility Range, the percentage of the award target which participants are
eligible to earn increases as net income increases, up to 100%. If the Company’s
net income is at or above the highest level of net income within the Eligibility
Range, each participant is eligible to earn the participant’s maximum award
target. All award payments under the 2009 Cash Incentive Program will be paid in
cash and, if payable under the 2010 Cash Incentive Program, are expected to be
settled in cash. If the Company’s Equity Incentive Plan is approved by
stockholders at the Company’s 2010 Annual Meeting of Stockholders, then the
Compensation Committee will have the discretion to settle awards payable under
the Management Incentive Plan in cash, shares of common stock or a combination
of cash and stock.

 

 

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The Compensation Committee has the discretion to make award payments in an
amount less than the pre-established award targets, even if the objective
business criteria are achieved. In deciding whether, and to what extent, to pay
an award payment to each named executive officer (other than the Chief Executive
Officer), an important factor considered by the Compensation Committee, in
exercising its discretion to reduce an award, is the Chief Executive Officer’s
evaluation of the individual performance of the named executive officer.
Generally, the Chief Executive Officer makes his recommendation based upon his
evaluation of the named executive officer’s individual contributions to the
performance of the Company and such other factors as he may deem relevant. The
final determination of all award payments to the named executive officers is
made by the Compensation Committee; however, the Compensation Committee may not
use these subjective criteria to increase the amount of any award that is
otherwise payable at a specific level based upon the attainment of the
objectively determined amount of net income.
For the 2009 Cash Incentive Program, the Eligibility Range was $57.5 million to
$63.5 million of net income. If the Company earned less than $57.5 million of
net income, no participant would have been entitled to an award payment under
this program. At $57.5 million of net income each participant would have been
eligible to receive up to 20% of his award target. At or above $63.5 million of
net income, each participant was eligible to receive up to 100% of his award
target. Between $57.5 million and $63.5 million of net income, the percentage of
the award target which each participant was eligible to receive increased as net
income increased.
For the 2010 Cash Incentive Program, the Eligibility Range is $71.2 million to
$78.4 million of net income. If the Company earns less than $71.2 million of net
income, no participant is entitled to an award payment under this program. At
$71.2 million of net income, Mr. Black is eligible to receive up to 30% of the
maximum award target and Messrs. Ullman, Hensley, Merry and Thorne are eligible
to receive up to approximately 15% of the maximum award targets. At or above
$78.4 million of net income, each participant is eligible to receive up to 100%
of the participant’s maximum award target. Between $71.2 million and
$78.4 million of net income, the percentage of the award target which each
participant is eligible to receive will increase as net income increases.

 

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