Exhibit 10.1


 


PERFORMANCE PLAN DEFINITIONS
AND PERFORMANCE CRITERIA FOR 2006

FOR THE ALDERWOODS SUPPORT FUNCTION ANNUAL INCENTIVE PLAN


 


2006
Performance Plan Definitions


 


1.               Accelerator:  The
Accelerator is the amount that is paid for achievement above the financial
target(s).


 


2.               Bonus Criteria:  The
Bonus Criteria are the main financial targets that need to be met in order for
a Bonus Award to be paid out. Refer to the Bonus Criteria chart in order to
determine what targets you need to meet in order to receive a Bonus Award.


 


3.               EBITDA:  Earnings
before Interest, Taxes, Depreciation and Amortization Impairment.


 


4.               Maximum Bonus Percentage: 
The percentage of an employee’s regular earnings that will be received
if maximum financial performance is achieved. This will not exceed two times
the target bonus.


 


5.               Operating Margin: 
Total Revenue minus Total Expenses.


 


6.               Overall Revenue: 
Funeral Home Revenue plus Cemetery Revenue.


 


7.               Pre-Qualifier:  The
Pre-Qualifier is the financial measure that has to be met in order to be
eligible for consideration for a Bonus Award. No Bonus Award will be paid
unless the Pre-Qualifier threshold is attained.


 


8.               Regular Earnings:  An
employee’s regular wages/salary paid during the calendar year, excluding
commissions, overtime pay and other forms of bonus or remuneration.


 


9.               Target Bonus Percentage: 
The percentage of an employee’s regular earnings that will be received
if 100% of the financial target(s) is achieved.


 


10.         Threshold:  The “Threshold”
is the minimum performance achievement required to meet the Pre-Qualifier “gate”
in order to qualify for a Bonus Award.


 


11.         Weighted Average:  An
average that takes into account the proportional relevance of each component,
rather than treating each component equally.


 


	
  Financial

  Measurement Criteria

  	
  Pay-out Split

  	
  Name

  	
  Financial Performance Scale with

  Corresponding Pay-out as a % of Annual Salary

  
	
  < 95%

  	
  95% or >

  (BPO Portion

  Only)

  	
  100%

  Target

  (Budget)

  	
  106%

  	
  112%

  Max.

  
	
  50% - Operating Profitability 
 = Earnings From

  Operations

  	
  90% = Financials

  10% = Succession Planning

  	
  Paul Houston

  	
  0%

  	
  0%

  	
  75%

  	
  112.5%

  	
  150%

  
	
   

  	
  66.7%
  = Financials

  	
  Ken Sloan

  	
  0%

  	
  16.65%

  	
  50%

  	
  75%

  	
  100%

  
	
  40% - Business Efficiency

  	
  33.3%
  = BPO’s

  	
  Ross Caradonna

  	
  0%

  	
  16.65%

  	
  50%

  	
  75%

  	
  100%

  
	
  = EBITDA

  	
   

  
	
  (Includes all incentive costs)

  	
  Note:

  
	
   

  	
  1.
  Financial measures will be calculated and paid out independently of each
  other

  
	
  10% - Revenue

  	
  2.
  Equal pro rata scale will be applied evenly to performance between target
  (budget) and maximum payout

  



 


	
  Financial

  Measurement Criteria

  	
  Pay-out Split

  	
  Name

  	
  Financial Performance Scale with

  Corresponding Pay-out as a % of Annual Salary

  
	
  < 95%

  	
  95% or >

  (BPO Portion

  Only)

  	
  100%

  Target

  (Budget)

  	
  106%

  	
  112%

  Max.

  
	
  100% - Pre Need Sales & Profitability

  	
  66.7% = Financials

  	
  SVP
  - Aaron Shipper

  	
  0%

  	
  13.2%

  	
  40%

  	
  60%

  	
  80%

  
	
  = Net PN Contribution 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Includes all incentive costs)

  	
  33.3% = BPO’s

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Note:

  
	
   

  	
  1. Financial
  measures will be calculated and paid out independently of each other

  
	
   

  	
  2. Equal
  pro rata scale will be applied evenly to performance between target (budget)
  and maximum payout