Document:

EX10.40

EXHIBIT 10.40

Avago Performance Bonus (“APB”)   
FY2012 Plan Document for Executive Employees 

	
		
	Document: Annual Performance Bonus for Executives
	Applicability:  Executive employees (Division Vice President, Vice President, Senior Vice President, President and Chief Executive Officer (“CEO”))

	Approved:  September 6, 2011
	Effective Date:  October 31, 2011

	 
	Review date:  Annual

Purpose

The purpose and scope of the Avago Performance Bonus (“APB”) Plan Document for Executive Employees is to define the process to award the annual incentive bonus and to ensure the Plan parameters are managed consistently across Avago Technologies (the “Company”).

Introduction

The Company has established the Avago Performance Bonus (“Program”) for eligible executive employees.  The objectives of this discretionary Program are to:

		
	▪
	Share the success of the Company

		
	▪
	Reward employees for outstanding business results

		
	▪
	Recognize levels of individual performance multiplier 

		
	▪
	Foster teamwork

		
	▪
	Retain employees

Program Period
 
Incentive awards under the Program are based on Corporate performance and, where applicable, Business Division or Function performance measured against predetermined targets for each Program period.  The Program period begins on the first day of each fiscal year and ends on the last day of the fiscal year. 

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Avago Technologies Confidential

Eligibility

Prior to the beginning of each Program period the criteria for participation in the Program will be set by the Compensation Committee of the Company's Board of Directors (the “Compensation Committee”) at its sole discretion.

Conditions of Eligibility: All regular full-time and regular part-time executive employees who are:
		
	•
	Not on a Sales Incentive Plan (SIP)

		
	•
	Employed before fiscal year fourth quarter

		
	•
	Employed on the APB payout date

		
	•
	On leave of absence (“LOA”) with eligible earnings during the Program period

Description

The performance results for the Program period are based on a weighting system comprised of Corporate performance and where applicable Business Division/Function performance.

		
	Corporate  
	Corporate performance for the Program period will be based on the

Performance        attainment of Company targets as defined for the specific fiscal year:  Targets 
are set by the CEO and the Compensation Committee. Attainment measurements and targets are maintained by Finance.

		
	Business Division
	Business Division or Function performance for the Program period will be

or Function         based on the attainment of Business Division or Function goals. Goals 
		
	Performance 
	are set by the CEO and the Compensation Committee. Attainment measurements and targets are maintained by Finance.

    
		
	Program Award
	The Program award payout (“Program Award”) for each participant will be

		
	Determination
	determined as follows.  

Definitions:
    
		
	1.
	Eligible Earnings:  Represents base wages paid during the performance period and includes vacation, holiday and sick pay. Eligible earnings exclude disability payments, bonus payments and allowances.  Total eligible earnings for the Program period will reflect part-time status, unpaid LOA, hire date or re-hire date.  

		
	2.
	Attainment %:  Payout on performance attainment for each goal between the threshold and the maximum will be determined by a linear formula.

		
	3.
	Performance Multiplier:  Based on performance each participant, other than the CEO, will be assigned a performance multiplier on a scale of 0.5 to 1.5 by the CEO, subject to the review and approval of the Compensation Committee. In the discretion of the Compensation Committee, the CEO may be assigned a performance multiplier on a scale of 0.5 to 1.5. 

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Avago Technologies Confidential

		
	4.
	Target Bonus Percent:  Percent of eligible earnings that will be paid if the Company and Business Division/Function attainment is 100% of goals.  This percent is assigned to each executive function or individual, as determined by the CEO and the Compensation Committee.

Target Bonus Percent is prorated based on eligibility and may be prorated based on a change in an executive's function or position that results in a change in Target Bonus Percentage during the performance period.

Any exceptions require approval from both the CEO and the Compensation Committee 

Payout 

The fiscal year end payout is made in cash after the end of the fiscal year and is calculated using the payout formula based on:

		
	•
	Actual attainment against fiscal year Corporate and Division/Function metrics

		
	•
	Current year performance multiplier

Payout formula

	
						
	Metric
	Weight
	Threshold
	Payout
Minimum
	Payout Target
	Payout 
Maximum

	Revenue
Growth
	25%
	60%1
	50%
	100%
	150%

	Operating Profit
	25%
	90%1
	50%
	100%
	150%

	Business Division or Function Results (includes Direct Expenses)
	50%
	Division/      Function Specific 2
	50%
	100%
	150%

               1 To be validated by Finance each year.
   2 Direct Expenses have a payout range of minimum 80% to maximum 120%

In the event the Compensation Committee elects to assign the CEO a Performance Multiplier greater than 1.0, the Compensation Committee may elect to pay the portion of the CEO's bonus amount that exceeds the bonus amount calculated using a Performance Multiplier of 1.0 in the form of an equity award, instead of paying such amount in cash. The Compensation Committee shall determine the type 

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Avago Technologies Confidential

and terms of any such equity award, which award shall be granted under the Company's 2009 Equity Incentive Award Plan.

Policies and Practices

Various considerations may impact the administration and payout of the Program.  Such considerations may include, but are not limited to the following:

		
	1.
	Program Administration:  The Compensation Committee will establish guidelines for the Program in line with corporate strategies and objectives.  The Compensation Committee has final authority as to any issues related to the interpretation and the administration of the Program, including the resolution of any unusual circumstances.  

		
	2.
	Compensation Committee Discretion: The Compensation Committee will set the Program performance targets.  The Compensation Committee may, at its sole discretion, at any time alter, amend, suspend or in any other way modify the Program to align with the changing needs of the Company without prior notification to any participant.

		
	3.
	Payment Authorization: Employees will be eligible to participate in the APB program period if they are employed before the fiscal year fourth quarter and remain employed on the payout date.  All awards must be approved by the CEO and the Compensation Committee. The Program award will be paid in full, as soon as administratively feasible, following the end of a Program period.

		
	4.
	Termination:  Any employee may be excluded from Program participation, at any time, at the sole discretion of the Compensation Committee.  Except as required by applicable law or regulation, in order to receive a Program award payment for the applicable Program period, an employee must be: (1) on the payroll, and (2) an eligible participant of the Program at the time of payout.  Except as required by applicable law or regulation, the Company will not seek repayment of a valid bonus payout if the employee terminates employment after payment for the previous performance period.

		
	5.
	Pro-rated Payments: Pro-rated payment will be made in cases as set forth below:

		
	•
	Position changes from non-sales to sales (on SIP) or from sales (on SIP) to non- 

		
	•
	sales.

		
	•
	Transfer between Business Divisions or Functions during the fiscal year of the performance period. 

		
	•
	Termination for disability:  In the event a participant terminates employment with the 

		
	•
	Company for disability reasons, such employee will be considered eligible for 

		
	•
	completed plan periods in which the employee participated.  

		
	•
	Termination upon death: Upon the death of a participant, the award will be paid along with all other payouts based on eligible earnings during the Program period.

Payment will be made to legal beneficiaries, as designated by the employee and on file with the Company.

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Avago Technologies Confidential

		
	6.
	Right of Employment and Payment:  Management and the Compensation Committee reserve the right, at their sole discretion, to restrict participation in the Program at any time.  Participation under this Program does not affect the employment status of the participant and does not imply continued employment with the Company.  Either participant or Company may terminate the employment relationship at any time, for any reason, with or without cause.

Payments made under the Program are not an element of the participant's salary or base compensation (“Compensation”) and shall not be considered as part of such Compensation in the event of severance, redundancy, resignation or any other situation unless required by local law.  The granting and receipt of payments under the Program is voluntary and at the Compensation Committee's sole discretion, and does not constitute a claim for further payments regardless of how many times such payments have previously been granted to the participant.

		
	7.
	Unfunded Status/Right of Assignment:  No assets are reserved for this Program and no person has a right or interest in Company assets as a result of the existence of this Program. No right or interest in the Program may be assigned or transferred, or subject to any lien, directly, by operation of law or otherwise, including without limitation, bankruptcy, pledge, garnishment, attachment, levy or other creditor's process.

		
	8.
	Taxes:  All awards payable under the Program are taxable as ordinary income in the year of payment and subject to applicable taxes and withholdings. Employees on a temporary relocation are paid and taxed from their home country.

		
	9.
	Plan Amendment or Termination: The Compensation Committee may amend or terminate this Program at any time.  While the Compensation Committee intends that any amendment or termination would be prospective, the Compensation Committee reserves the right to act retroactively without prior written notice to the participants.

		
	10.
	Final Decision:  The Compensation Committee will make the final determination as to the eligibility for participation in the Program and any other applicable terms.  All decisions made by the Compensation Committee regarding this Program shall be final.

This Program shall be governed by local laws and regulations.

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Avago Technologies Confidential

APPENDIX

Payout Examples at Target:  
This example of the fiscal year end payout is based on the following assumptions:
		
	•
	Employed full-time during the entire fiscal year

		
	•
	Annual Eligible Earnings in local currency is 100,000

		
	•
	Performance Multiplier is 1.5 or 150% applies

		
	•
	Bonus target is 30%

		
	•
	Corporate attainment for the fiscal year is 100%

		
	•
	Division attainment is 100%

(Note: The example does not represent actual executive level bonus targets or salaries)

Payment:  The fiscal year end payout is made after the end of the fiscal year and is calculated using the formula based on:

		
	•
	Actual attainment against fiscal year Corporate and Division/Function metrics

		
	•
	Current year performance multiplier

	
						
	Metric
	Weight
	Threshold
	Payout
Minimum
	Payout Target
	Payout 
Maximum

	Revenue
Growth
	25%
	60%
	50%
	100%
	150%

	Operating Profit
	25%
	90%
	50%
	100%
	150%

	Business Division or Function Results
	50%
	Division/      Function Specific
	50%
	100%
	150%

Payout Formula

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Avago Technologies Confidentialex101.htm

  

  

  

EXHIBIT 10.1

SECOND AMENDMENT OF THE

CHANGE IN CONTROL AGREEMENT BETWEEN

LAKELAND FINANCIAL CORPORATION

AND [NAME]

This Second Amendment is made and entered into effective as of December 13, 2011 (the “Effective Date”) by and between Lakeland Financial Corporation, an Indiana Corporation (the “Company”) and [NAME] (“Executive,” and together with the Company, the “Parties”).

 

RECITALS

 

A.           The Parties have made and entered into that certain Change in Control Agreement, effective [DATE], 2000, as amended effective December 9, 2008 (the “Agreement”).

 

B.           The Parties desire to clarify the definition of change in control severance amount under the Agreement and to remove the following from the calculation of such amount: (i) the aggregate dollar amount accrued under the long term incentive plan payable in the two plan years subsequent to a change in control and (ii) any incentive compensation accrued or payable in the year of a change in control other than the amount payable as annual bonus compensation for the year in which the change in control occurs.

 

C.           The Parties desire to amend the golden parachute payment adjustment provision of the Agreement to eliminate any excise tax gross up under the Agreement.

 

D.           Pursuant to Section 15 of the Agreement, the Agreement may be amended by written agreement signed by the Parties.

 

E.           The Parties desire to amend the Agreement on the terms hereinafter set forth.

 

AGREEMENT

 

For good and valuable consideration, the sufficiency of which is agreed to and acknowledged, the Parties, intending to be legally bound, hereby agree that, as of the Effective Date, the Agreement be and is hereby amended as follows:

 

1. Section 2(D) is deleted in its entirety and replaced with the following:

 

“           D.           ‘Change in Control Severance Amount’ shall mean the amount equal to two (2) times the sum of (i) the greater of the Executive’s then current annual base salary or the Executive’s annual base salary as of the date one (1) day prior to the Change in Control and (ii) the designated percentage of the annual base salary amount determined under clause (i) immediately above payable to the Executive as annual bonus compensation for the year in which the Change in Control occurs.”

 

2. Section 4 is deleted in its entirety and replaced with the following:

 

“           4.           Golden Parachute Payment Adjustment.

 

A.           If the value of any payment or other benefit the Executive would receive from the Company or otherwise in connection with a Change in Control (the ‘Benefit’) would (a) constitute a ‘parachute payment’ within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the ‘Code’), and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the ‘Excise Tax’), then the Benefit shall be reduced to the Reduced Amount.  The ‘Reduced Amount’ shall be either (i) the largest portion of the Benefit that would result in no portion of the Benefit being subject to the Excise Tax or (ii) the largest portion, up to and including the total, of the Benefit, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate), results in the Executive’s receipt, on an after-tax basis, of the greater amount of the Benefit notwithstanding that all or some portion of the Benefit may be subject to the Excise Tax.  If a reduction in payments or benefits constituting ‘parachute payments’ is necessary so that the Benefit equals the Reduced Amount, reduction shall occur in the following order unless the Executive elects in writing a different order (provided, however, that such election shall be subject to the Company’s approval if made on or after the date on which the event that triggers the Benefit occurs and to the extent that such election does not violate Section 409A): reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits.  In the event that accelerated vesting of stock awards is to be reduced, such accelerated vesting shall be cancelled in the reverse order of the grant date of the Executive’s stock awards unless the Executive elects in writing a different order for cancellation.

 

B.           The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform any calculations necessary in connection with this Section 4.  If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder.  The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

 

C.           The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Executive and the Company within fifteen (15) calendar days after the date on which the Executive’s right to a Benefit is triggered (if requested at that time by the Executive or the Company) or such other time as requested by the Executive or the Company.  If the accounting firm determines that no Excise Tax is payable with respect to a Benefit, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive that no Excise Tax will be imposed with respect to such Benefit.  Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Executive and the Company, except as set forth below.

 

D.           If, notwithstanding any reduction described in this Section 4, the U.S. Internal Revenue Service (the ‘IRS’) determines that the Executive is liable for the Excise Tax as a result of the receipt of the payment of benefits as described above, then the Executive shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination, or, in the event the Executive challenges the final IRS determination, within thirty (30) days after a final judicial determination, a portion of the payment equal to the Repayment Amount.  The ‘Repayment Amount’ with respect to the payment of benefits shall be the smallest amount, if any, required to be paid to the Company so that the Executive’s net after-tax proceeds with respect to any payment of benefits (after taking into account the payment of the Excise Tax and all other applicable taxes imposed on such payment) are maximized.  The Repayment Amount with respect to the payment of benefits shall be zero dollars ($0) if a Repayment Amount of more than zero dollars ($0) would not result in the Executive’s net after-tax proceeds with respect to the payment of such benefits being maximized.  If the Excise Tax is not eliminated pursuant to this paragraph, the Executive shall pay the Excise Tax.

 

E.           Notwithstanding any other provision of this Section 4, if (i) there is a reduction in the payment of benefits as described in this Section 4, (ii) the IRS later determines that the Executive is liable for the Excise Tax, the payment of which would result in the maximization of the Executive’s net after-tax proceeds (calculated as if the Executive’s benefits had not previously been reduced), and (iii) the Executive pays the Excise Tax, then the Company shall pay to the Executive those benefits that were reduced pursuant to this Section 4 contemporaneously or as soon as administratively possible after the Executive pays the Excise Tax so that the Executive’s net after-tax proceeds with respect to the payment of benefits is maximized.”

 

3. In all other respects, the Agreement shall remain unchanged and in full force and effect.

 

IN WITNESS WHEREOF, the Parties have executed this Second Amendment as of the Effective Date.

 

LAKELAND FINANCIAL CORPORATION

 

By:                                                                          

 

Its:                                                                          

 

EXECUTIVE

 

[NAME]

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