Exhibit 10.1
Summary of Named Executive Officer 2010 Salaries, 2009 Bonus
Awards, 2010 Maximum Bonus Potential, and 2010 Equity and Performance Awards
Base Salary Adjustments. The Compensation Committee approved, and the board of
directors ratified, adjustments to the annual base salaries for certain of the
Named Executive Officers after a review of performance and competitive market
data. The table below sets forth the annual base salary levels of the Company’s
Named Executive Officers for 2009 and 2010 (the salary for 2009 became effective
on April 1, 2009, and the salary for 2010 will become effective as of April 1,
2010). The Named Executive Officers were determined based on those identified in
the Summary Compensation Table contained in the Company’s proxy statement dated
April 16, 2009.
Annual Bonus Awards. The Compensation Committee also authorized, and the board
of directors ratified, the payment of annual incentive (i.e., bonus) awards to
each of the Company’s executive officers in respect of the year ended
December 31, 2009. The annual bonus awards were made pursuant to the Company’s
annual bonus plan, with target percentages ranging from 70% to 130% in 2009. For
each of the Named Executive Officers a minimum target percentage was established
pursuant to such executive’s employment agreement with the Company, which are
listed as exhibits to the Company’s Current Report on Form 8-K to which this
Exhibit 10.1 is attached and which are hereby incorporated by reference herein.
The Employment Agreements for the Named Executive Officers and Mr. Paz are also
described in the Company’s Current Report on Form 8-K filed October 31, 2008.
Pursuant to the bonus plan, in order for any bonus amount to be paid the Company
must meet an annual financial goal which is based on budgeted EBITDA (earnings
before interest, taxes, depreciation and amortization) and earnings per share.
If the corporate financial target is not met, then the corporate bonus pool is
reduced to the extent necessary to enable the Company to meet its target. If the
Company has met its annual financial goal, then actual bonus awards for
executive officers are determined based on the executive officers’ respective
bonus targets and an evaluation by the Committee (and in the case of senior
executives also by the CEO) of the extent to which work plan goals were
achieved. In addition, if the Company meets certain “stretch” financial targets,
bonus targets may be increased by as much as 100%. The Committee reviews and
approves the annual financial targets. For 2009, the Company achieved its
“stretch” financial goals, and, accordingly, bonuses awarded to the Named
Executive Officers were enhanced by up to 100%.
The Compensation Committee also authorized, and the board of directors ratified,
the award of annual incentive (i.e., bonus) awards to each of the Company’s
Named Executive Officers with respect to the year ending December 31, 2010.
These awards were granted as “Other Awards” under the Company’s 2000 Long-Term
Incentive Plan, as amended (the “2000 LTIP”), and represent the maximum amount
which may be earned by the executive based on the achievement of individual and
corporate stretch financial and workplan goals. The Compensation Committee may
exercise discretion to reduce such bonuses based on Company performance,
individual performance and other factors, but may in no event increase the
amount of such bonuses beyond the maximum. In addition, if certain threshold
earnings per share targets are not met, then no such bonuses may be paid.
The following table sets forth the 2009 and 2010 base salary levels, along with
the annual bonus awards for 2009 and the maximum annual bonus awards for 2010,
for each of the Named Executive Officers:

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                                                              Annual Bonus  
Maximum         Annual Base Salary   Award   Bonus Award Name   Title   2009  
2010   2009   2010 George Paz  
President, CEO & Chairman
  $ 980,000     $ 1,100,000     $ 2,528,500     $ 2,782,000   Jeffrey Hall  
Executive Vice President & CFO
  $ 530,000     $ 600,000     $ 714,000     $ 932,000   Michael Holmes  
Executive Vice President, Human Capital & Emerging Markets
  $ 453,200     $ 453,200     $ 629,860       N/A * Patrick McNamee  
Executive Vice President & COO
  $ 494,400     $ 550,000     $ 687,120     $ 857,760  

 

*   As previously disclosed, Mr. Holmes has announced his intention to leave the
Company.

Annual Long Term Incentive Awards
On February 17, 2010, the Compensation Committee approved, and on March 3, 2010
the board of directors ratified, awards of certain long term incentive
compensation to each of the Named Executive Officers (other than Mr. Holmes).
The long term incentive compensation awards are comprised of a mix of
performance shares, non-qualified stock options and restricted stock units,
granted under the 2000 LTIP, as follows:

                                      Non-Qualified   Performance   Restricted
Stock Name   Title   Stock Options   Shares   Units George Paz  
President, CEO & Chairman
  87,193     24,749     17,678   Jeffrey Hall  
Executive Vice President & CFO
  29,583     4,798     4,798   Michael Holmes  
Executive Vice President, Human Capital & Emerging Markets
    N/A *     N/A *     N/A * Patrick McNamee  
Executive Vice President & COO
  26,469     4,293     4,293  

 

*   As previously disclosed, Mr. Holmes has announced his intention to leave the
Company.

Performance Shares. The performance shares are settled in shares of the
Company’s common stock (the “Stock”) on a share-for-share basis. The number of
shares of Stock to be delivered upon settlement of the performance shares is
determined based upon the Company’s performance over a set period versus a peer
group of companies selected by the Compensation Committee.
Specifically, the number of shares issued in settlement of the performance share
awards will depend on where the Company’s performance for the period from
January 1, 2010 through January 1, 2013 ranks in relation to the designated peer
group in three equally-rated metrics:

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  •   compound annual shareholder return (price appreciation plus reinvestment
of monthly dividends and the compounding effect of dividends paid on reinvested
dividends),     •   compound annual growth in earnings per share (basic earnings
per share before extraordinary items and discontinued operations), and     •  
average return on invested capital (income before extraordinary items (available
for common stock) divided by total invested capital, which is the sum of total
long-term debt, preferred stock, minority interest and total common equity).

In order for any shares to be issued under the performance share awards, the
Company’s composite performance must rank in at least the 40th percentile in
relation to its peer group. Assuming the Company’s composite performance for the
performance period is at the 40th percentile, the actual shares of Stock issued
will equal 35% of the award targeted for the Named Executive Officer; at the
50th percentile, the actual shares of Stock issued will equal 100% of the award
targeted for the Named Executive Officer; and at the 80th percentile, the actual
shares of Stock issued will equal 250% of the award targeted for the Named
Executive Officer, which is the maximum number of shares that can be awarded. If
the Company’s composite performance falls between these percentile rankings, the
actual shares of Stock issued will be determined by interpolation.
Realization of the performance share awards and their actual value, if any, will
depend on the applicable targets being met and the market value of the Stock on
the date the performance share awards are settled.
The awards provide for certain rights in the event of termination of employment
as a result of death, disability, retirement or termination by the Company
without cause (as defined), but terminate in the event of termination of
employment for any other reason prior to the last day of the performance period.
Notwithstanding the foregoing, the awards provide that upon a change of control
(as defined) prior to the last day of the performance period, participants who
remain employed on the date of a change in control or who terminated earlier on
account of death, disability or retirement will receive cash equal to the value
of a portion of the Stock represented by the performance shares on the last
trading day before the change in control, and that participants who were
terminated earlier by the Company without cause will receive the cash value of
the Stock represented by between 100% and 250% of the performance shares on the
last trading day before the change in control.
The performance shares are subject to the terms of the 2000 LTIP and a
Performance Share Agreement entered into with each participant. The 2000 LTIP is
listed as Exhibits 10.5, 10.6 and 10.7, and the form of award agreement is
listed as Exhibit 10.2, to the Current Report on
Form 8-K to which this Exhibit 10.1 is attached and each is hereby incorporated
herein by this reference.
Stock Options. The non-qualified stock options (“options”) were granted with a
specified exercise price of $98.99 per share, which was equal to the fair market
value of the Stock on the date of grant. In accordance with the Company’s Policy
for Grant Approvals and for Establishing Grant Date for Equity Grants, the grant
date for the options is March 3, 2010, which was the date the Company’s board of
directors ratified the grant. The options vest and become exercisable as to
one-third of each award annually on February 28, 2011, 2012, and 2013, and
expire on February 28, 2017. The actual value, if any, of the options will
depend on the market value of the Stock on the date the options are exercised.
The options are subject to the terms and conditions of the 2000 LTIP as well as
a Stock Option Award Agreement entered into with each participant. The 2000 LTIP
is listed as Exhibits 10.5, 10.6 and 10.7, and the form of award agreement is
listed as Exhibit 10.3, to the Current Report on Form 8-K to which this
Exhibit 10.1 is attached and each is hereby incorporated herein by this
reference.
Restricted Stock Units. The restricted stock units awarded to the Named
Executive Officers entitle the grantee to receive shares upon the satisfaction
of the vesting conditions. The restricted stock units are scheduled to vest as
to one-third of each award annually on February 28, 2011, 2012, and 2013. The
restricted stock units are subject to the terms and conditions of the 2000 LTIP
as well as a Restricted Stock Unit Agreement entered into with each participant.
The 2000 LTIP is listed as Exhibits 10.5, 10.6 and 10.7, and the form of award
agreement is listed as Exhibit 10.4, to the Current Report on Form 8-K to which
this Exhibit 10.1 is attached and each is hereby incorporated herein by this
reference.

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