Document:

Exhibit 10.11

 

MAGELLAN HEALTH SERVICES

Management Bonus Plan

2004

 

Purpose

 

The purpose of Magellan Health Services’
Management Bonus Plan is to reward employees for achieving specific performance
objectives contributing to the overall results of the Company.  Business units with function specific plans,
such as sales, and recovery functions, are covered under separate plans.

 

Eligible
Participants

•                   Must be full time
employees not participating in any other incentive program.

•                   Must be currently meeting
or exceeding performance standards.

•                   Must have received a
minimum performance review score of 3.0.

•                   Must not have
submitted a verbal or written resignation of employment.

•                   Must have been hired on
or before January 31, 2004 to be eligible to receive 100% of bonus award.

•                   Must have been hired
between February 1 through April 30, 2004 to be eligible to receive 75% of
bonus award.

•                   Must have been hired
between May 1 through June 30, 2004 to be eligible to receive 50% of the bonus
award.

 

Plan Funding

 

The plan is funded based on the company
meeting or exceeding its EBITDA* targets.

 

	
  EBITDA Target

  	
   

  	
  Funding Percentage

  	
   

  
	
  $ 144.8 Million

  	
   

  	
  100%

  	
   

  

 

•                  EBITDA is the Company’s
consolidated net revenues, less salaries, cost of care and other operating
expenses (including amounts accrued for payments under this plan) plus equity
in earnings (or minus equity in losses) of unconsolidated subsidiaries, less
special charges, all as reported by the Company.

 

The
Target Funding Pool will equal the total of the Target Bonuses (salary times
Target Bonus Percentage, see below) of the eligible employees.  The Funding Percentage is the portion or
increment of the Target Funding Pool that will determine the Funding Pool.

 

If the EBITDA Target is met, the Funding
Percentage will equal 100%.

 

If the EBITDA Target is not met, the Target
Funding Pool for incentives will be reduced dollar for dollar until the EBITDA
Target can be met, or the Target Funding Pool is exhausted, whichever comes
first. Any funds remaining after the EBITDA Target is met will be the Maximum
Funding Pool for incentives under the Plan. 
In such case, the Funding Percentage will equal the percentage of the
Maximum Funding Pool to the Target Funding Pool.

 

If the EBITDA target is exceeded, the Funding
Pool will be increased by increasing the Funding Percentage by an amount
determined by the Compensation Committee in its discretion.

 

1

 

Performance Factors

 

In addition to the Funding Percentage, there
are two other factors that determine the bonus amount for each employee.  The first is the Business Unit Performance
Factor and the second is the Individual Performance Factor.

 

Business Unit Performance
Percentage

 

Each SBU, CMC and Corporate Support Area has
Performance Goals that include financial performance as well as other corporate
strategic goals.  Based on the
achievement of these Business Unit Performance Goals, each business unit will
be assigned a Business Unit Performance Percentage by the CEO, for those units
reporting directly to the CEO; or the COO, with the approval of the CEO, for
those units reporting up to the COO. 
Generally, the Business Unit Performance Percentage can range from 0% to
200%.

 

Individual Performance Percentage

 

In order to receive an incentive bonus,
individuals must be recommended by their immediate supervisor, based on the
achievement of their Individual Performance Goals. The Individual Performance
Percentage will be determined by each employee’s immediate supervisor based on
the extent to which the employee met and exceeded their personal Individual
Performance Goals.   Generally,
percentages can range from 0% to 200% of target bonus with a percentage of 100%
assigned to an employee whose score is between consistently meets to consistently
exceeds expectations with respect to their Individual Performance Goals.  In general, employees with a performance
rating lower than 3.0 will not be eligible to receive a bonus.  All recommendations for incentive awards will
be substantiated by appropriate documentation of performance goals and
assessment, and will be reviewed and approved by each level of management above
the immediate supervisor, up to and including the CEO.

 

Target Bonus Percentage

 

Each employee in Grades 37 and above has a
Target Bonus Percentage.  The Target
Bonus Percentages by Grade are as follows:

 

Grades 37
and Above Target Bonus Percentage Levels

 

	
  Level in Organization

  	
   

  	
  Target
  Bonus

  % of Base Salary

  
	
  Chairman and CEO

  	
   

  	
  100%

  
	
  President & Chief Operating Officer

  	
   

  	
  75%

  
	
  Chief Officers

  	
   

  	
  40 to 60%

  
	
  SVPs

  	
   

  	
  25 to 40%

  
	
  CCO & Grades 42 to 44

  	
   

  	
  20 to 25%

  
	
  Grades 39 to 41

  	
   

  	
  15%

  
	
  Assoc MD, Medical Directors, and Vice President of
  Medical Services

  	
   

  	
  10%

  
	
  Grades 37 and 38

  	
   

  	
  8%

  

 

Payout Formula

 

An employee’s bonus under the Management Bonus
Plan will be determined pursuant to the following formula:

 

2

 

Salary 
X  Target Bonus Percentage  X 
Individual Performance

Percentage 
X  Business Unit Performance
Percentage X

Funding Percentage.

 

For example, if the EBITDA target was met but
not exceeded, an employee in Grade 42 with a salary of $110,000 and a 20% Bonus
Target whose Business Unit received a Performance Percentage of 110% and who
received an Individual Performance Percentage of 105% would receive a Bonus of
$25,410, determined as follows:

 

$110,000 X 20% X 105% X 110% X 100% = $25,410.

 

Condition of Payout

 

No bonus will be paid to any employee if
employment is terminated, whether voluntary or involuntary, prior to the actual
payment date.

 

Payout Approval

 

The Compensation Committee of the Board must
separately approve any payout for officers of the Company for whom the
Compensation Committee must approve salary and/or benefits under the
Compensation Committee approval policy.

 

3Exhibit 10.1

 

	
  Performance
  Share Award Agreement

  	
  Staples,
  Inc.

  Employer ID:
  04-2896127

  500 Staples
  Drive

  Framingham, MA
  01702

  

 

	
  «FirstName» «LastName»

  	
   

  	
  ACCOUNT ID:

  	
   

  	
  «AccountID»

  
	
  «Address1»

  	
   

  	
  LOCATION:

  	
   

  	
  «ExtraField2»

  
	
  «Address2»

  	
   

  	
   

  	
   

  	
   

  
	
  «City», «State» «Zip»

  	
   

  	
   

  	
   

  	
   

  
	
  «Country»

  	
   

  	
   

  	
   

  	
   

  

 

Staples,
Inc. (“Staples”) hereby agrees to award to the recipient named above (the “Recipient”)
on the date set forth below (the “Vesting Date”) the number of shares of Common
Stock of Staples (the “Shares”), in accordance with and subject to the terms,
conditions, and restrictions of this Agreement (as defined below). If the
conditions described below are satisfied, such award will be made under the
terms of the Staples 2004 Stock Incentive Plan, as amended from time to time
(the “Plan”), on the Vesting Date.

 

	
  Performance
  Shares Award No.:

  	
   

  	
  «GrantNumber»

  	
   

  
	
  Stock Plan:

  	
   

  	
  2004PS

  	
   

  
	
  Date of
  Agreement:

  	
   

  	
   

  
	
  Performance
  Period:

  	
   

  	
  FY 20__ – FY 20__ (three years)

  
	
  Total Number of
  Shares @ Target:

  	
   

  	
  «SharesGranted»

  
	
  Vesting Date:

  	
   

  	
  As defined in Section 2(b) of PSA20     ,

  the date of the first regularly

  scheduled meeting of the Board of

  Directors in FY 20__ (generally in

  March) at which the Board of

  Directors certifies that the

  Performance Criteria have been

  satisfied.

  

 

By your acceptance of this Performance Share Award
Agreement, you agree that any Shares will be awarded under and governed by the
terms and conditions of the Plan and by the terms and conditions of the Staples
Performance Share Award Agreement – Terms and Conditions (“PSA20__”), which is attached
hereto (this Performance Share Award Agreement and the PSA20__ are together
referred to as the “Agreement”).

 

Performance
Criteria: The following Performance Criteria must be satisfied for an award of
Shares to be made under this Agreement.  As
more fully described in PSA20__, the number of Shares awarded on the Vesting
Date shall be determined based on the extent to which the FY 20__ - FY 20__ Cumulative
RONA Dollars are achieved.  All awards of
Shares require certification of the Staples Board of Directors that the
Performance Criteria have been satisfied.

 

1

 

Performance Share Payout Schedule

 

	
  FY 20__ - FY 20__ Cumulative
  RONA Dollars*

  	
   

  	
  % Target Shares Earned

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  (Threshold)

  	
   

  	
  90

  	
  %

  
	
  $

  	
  (Target)

  	
   

  	
  100

  	
  %

  
	
  $

  	
   

  	
   

  	
  125

  	
  %

  
	
  $

  	
   

  	
   

  	
  150

  	
  %

  
	
  $

  	
   

  	
   

  	
  175

  	
  %

  
	
  $

  	
  (Maximum)

  	
   

  	
  200

  	
  %

  

 

*
Cumulative RONA
Dollars are in millions.  For purposes of
this Agreement, “Cumulative RONA Dollars” means the cumulative profit generated
across the Staples business units in excess of the capital employed during the
Performance Period calculated in a manner consistent with the method used by
Staples for financial planning purposes; provided that such term specifically
excludes Corporate Contingency and any cash held at the Staples, Inc. level.

 

You understand and agree that this Agreement is
being awarded to you in exchange for your execution of a Non-Compete and
Non-Solicitation Agreement in a form approved by Staples.

 

	
  Accepted
  by:

  	
  Staples, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Ronald L.
  Sargent

  	
   

  
	
  «FirstName» «LastName»

  	
  Ronald L.
  Sargent 

  
	
   

  	
  President and
  Chief Executive Officer

  
				

 

Attachment:  Staples, Inc. PSA20__

 

 

STAPLES, INC.

PERFORMANCE SHARE AWARD AGREEMENT – Terms and
Conditions

 

1.              Award.  If all the conditions set forth in this
Agreement are satisfied, on the Vesting Date an award of Shares will be made
under the Plan to the Recipient named in the accompanying Performance Share
Award Agreement.  No Shares will be
delivered to the Recipient or transferred into the Recipient’s name until the
Vesting Date (except as provided in Section 8), and the Recipient shall
have no rights to any Shares or any rights associated with such Shares (such as
dividend or voting rights) until the Vesting Date.  Except where the context otherwise requires,
the term “Staples” shall include any parent and all present and future
subsidiaries of Staples as defined in Sections 424(e) and 424(f) of the
Internal Revenue Code of 1986, as amended or replaced from time to time (the “Code”).  Capitalized terms used but not defined herein
shall have the meaning ascribed to them in the Performance Share Award
Agreement.

 

2.              Conditions
for the Award.  Except
as provided in Sections 3 and 8, an award of Shares on the Vesting Date shall
be made only if:

 

(a)                                  The
Recipient is, and has continuously been, an employee of, or a consultant to,
Staples beginning with the date of this Agreement and continuing through the
Vesting Date; and

 

(b)                                 The
Performance Criteria set forth in the accompanying Performance Share Award
Agreement are satisfied during the Performance Period.  The Staples Board of Directors, upon
recommendation of the Compensation Committee, must determine and certify on the
date of its first regularly scheduled meeting in FY 20__ (generally in March)
whether, and to what extent, the Performance Criteria have been achieved.  The date on which the Board of Directors
certifies that the Performance Criteria have been satisfied shall be the “Vesting
Date” for purposes of this Agreement.  In
making its determination, the Compensation Committee may adjust the Performance
Criteria to take into account accounting changes, acquisitions and related
charges, and other special one-time or extraordinary gains and/or losses and
other one-time or extraordinary events as permitted under the Plan; provided that
the Compensation Committee may not adjust the Performance Criteria to take into
account foreign currency exchange rate fluctuations, changes in corporate tax
rates or recurring store closures consistent with historic patterns (with
widespread, out of the ordinary store closures not being consistent with
historic patterns).  Awards of Shares
shall be made only at the percentages set forth in the Performance Share Award
Agreement under the heading “% Target Shares Earned”; there will be no pro-rata
issuances of Shares for achievement of other FY 20__ – FY 20__ Cumulative RONA
Dollar amounts.  If the minimum Threshold
FY 20__ – FY 20__ Cumulative RONA Dollars is not achieved during the
Performance Period, no Shares will be issued and this Agreement will be of no
force or effect.

 

3.              Employment
Events Affecting Payment of Award.

 

(a)                                  Except
as provided in Section 3(b) and in Section 8, if the Recipient
terminates employment with Staples prior to the Vesting Date, for any reason or
no reason, with or without cause, no Shares will be issued and this Agreement
will be of no further force or effect.

 

(b)                                 If
the Recipient (i) dies, (ii) becomes disabled (within the meaning of Section 22(e)(3)
of the Internal Revenue Code), or (iii) terminates employment after attaining
age 55 and at the time of such termination of employment the sum of the years
of service (as determined by Staples Board of Directors) completed by the
Recipient plus the Recipient’s age is greater than or equal to 65, in each case
prior to the Vesting Date, then the Recipient or his estate will nevertheless
be awarded on the Vesting Date the number of Shares determined under Section 2(b)
hereof as if the Recipient were still employed on the Vesting Date.

 

(c)                                  If
(i) the Recipient’s relationship with Staples is terminated by Staples for
Cause (as defined below) or (ii) if the Recipient retires or resigns and
Staples determines within six months thereafter that the Recipient’s conduct
prior to his retirement or resignation warranted discharge for Cause, or (iii)
Staples determines that the Recipient’s conduct after termination of the
employment relationship fails to comply with the terms of any non-competition,
non-solicitation or confidentiality provision contained in any employment,
consulting, advisory, proprietary information, non-competition,
non-solicitation or other similar agreement between the Recipient and Staples,
then, without limiting any other remedy available to Staples, the Shares (and
any shares issued under Section 5 hereof) shall be repurchased by Staples
at a repurchase price of zero and ownership of all right, title and interest in
and to the such shares shall be forfeited and revert to Staples as of the date
of such determination; or, if the Recipient no longer owns the shares at such time,
Staples shall be entitled to recover from the Recipient the gross profit earned
by the Recipient upon the disposition (whether by sale, gift, donation or
otherwise) of such shares.

 

4.              Delivery
of Shares.  Staples
shall, within 30 days of the Vesting Date (or, if applicable, the date the
Shares vest under Section 8), effect the issuance of the Shares by
delivering the Shares to a broker designated by the Recipient.

 

5.              Dividend
Equivalent Rights.  If any Shares are awarded to the Recipient
pursuant to this Agreement, then the Recipient shall also be entitled to
receive a number of shares of Staples Common Stock equal to (A) (i) the number
of Shares awarded to the Recipient under Section 2 multiplied by (ii) the
cumulative amount of cash dividends paid by Staples that the Recipient would
have received had he owned the awarded Shares on each dividend record date
during the Performance Period, divided by (B) the closing price of the Common
Stock on the Vesting Date; provided, however, that cash will be paid in lieu of
any fractional shares the Recipient would be entitled to receive under this Section 5.

 

1

 

6.              No
Special Employment or Similar Rights. 
Nothing contained in the Plan or this Agreement shall be construed or
deemed by any person under any circumstances to bind Staples to continue the
employment or other relationship of the Recipient with Staples for the period
prior to or after the Vesting Date.

 

7.              Adjustment
Provisions.

 

(a) Changes in Capitalization.  In the event of any change in capitalization
of Staples, as described in Section 9(a) of the Plan, the Recipient shall,
with respect to the Shares, be entitled to the rights and benefits, and be
subject to the limitations, set forth in Section 9(a) of the Plan.

 

(b)  Liquidation or Dissolution.  In
the event of a liquidation or dissolution of Staples, this Agreement shall be
of no further force or effect and no Shares shall be awarded hereunder,
provided that if such liquidation or dissolution also constitutes a Change in
Control as defined in Section 8(a) hereof, then the provisions of Section 8
and not the provisions of this Section 7(b) shall govern.

 

(c) Reorganization Event.  In the event of a Reorganization Event as
defined in Section 9(c)(1) of the Plan, the Recipient shall, with respect
to the Shares, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 9(c) of the Plan; provided that if such
Reorganization Event also constitutes a Change in Control as defined in Section 8(a)
hereof, then the provisions of Section 8 and not the provisions of this Section 7(c)
shall govern.

 

(d)  Board Authority to Make
Adjustments.  Any
adjustments under this Section 7 will be made by the Board of Directors,
whose determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. 
No fractional shares will be issued with respect to Shares on account of
any such adjustments.

 

8.              Change
in Control.

 

(a)  Definitions.
 For purposes of this Agreement, the
following terms shall have the following meanings:

 

(i)  A “Change in Control” shall be deemed to have
occurred if (A) any “person”, as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (the “Exchange Act”) (other than
Staples, any trustee or other fiduciary holding securities under an employee
benefit plan of Staples, or any corporation owned directly or indirectly by the
stockholders of Staples in substantially the same proportion as their ownership
of stock of Staples), is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of Staples
representing 30% or more of the combined voting power of Staples’ then
outstanding securities (other than pursuant to a merger or consolidation
described in clause (1) or (2) of subsection (C) below); (B) individuals
who, as of the date hereof, constitute the Board of Directors of Staples (as of
the date hereof, the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board of Directors, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by Staples’ stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the directors of Staples, as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; (C) the stockholders of Staples approve a merger or consolidation of
Staples with any other corporation, other than (1) a merger or consolidation
which would result in the voting securities of Staples outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 75%
of the combined voting power of the voting securities of Staples or such
surviving entity outstanding immediately after such merger or consolidation, or
(2) a merger or consolidation effected to implement a recapitalization of
Staples (or similar transaction) in which no “person” (as defined above)
acquires more than 30% of the combined voting power of Staples’ then
outstanding securities; or (D) the stockholders of Staples approve an agreement
for the sale or disposition by Staples of all or substantially all of Staples’
assets.

 

(ii) “Surviving
Corporation” shall mean (x) in the case of a Change in Control pursuant to
clause (A) or clause (B) of Section 10(a)(i), Staples; (y) in the case of
a Change in Control pursuant to clause (C) of Section 10(a)(i), the
surviving or resulting corporation in such merger or consolidation; and (z) in
the case of a Change in Control pursuant to Clause (D) of Section 10(a)(i),
the entity acquiring the majority of the assets being sold or disposed of by
Staples.

 

(iii) “Cause,”
as determined by Staples or the Surviving Corporation (which determination
shall be conclusive), shall mean:

 

(A) Willful failure by the Recipient to substantially
perform his or her duties with Staples (other than any failure resulting from
incapacity due to physical or mental illness); provided, however, that Staples
has given the Recipient a written demand for substantial performance, which
specifically identifies the areas in which the Recipient’s performance is
substandard, and the Recipient has not cured such failure within 30 days after
delivery of the demand.  No act or
failure to act on the Recipient’s part will be deemed “willful” unless the
Recipient acted or failed to act without a good faith or reasonable belief that
his or her conduct was in Staples’ best interest; or

 

(B) Breach by the Recipient of any provision of any
employment, consulting, advisory, proprietary information, non-disclosure,
non-competition, non-solicitation or other similar agreement between the
Recipient and Staples, including, without limitation, the Proprietary and
Confidential Information Agreement and/or the Non-Compete and Non-Solicitation
Agreement; or

 

(C) Violation by the Recipient of the Code of Ethics or
an attempt by the Recipient to secure any improper personal profit in
connection with the business of Staples; or

 

 

(D) Failure by the Recipient to devote his or her full
working time to the affairs of Staples except as may be authorized in writing
by Staples’ CEO or other authorized Company official; or

 

(E) The Recipient’s engagement in business other than
the business of Staples except as may be authorized in writing by Staples’ CEO
or other authorized Company official; or

 

(F) The Recipient’s engagement in misconduct, which is
demonstrably and materially injurious to Staples.

 

(b) Effect of Change in Control.  Notwithstanding the provisions of Section 2,
if a Change in Control of Staples occurs prior to the Vesting Date and while the
Recipient is employed by Staples, then the greater of (X) a number of Shares
determined as if the Target FY 20__ - FY 20__ Cumulative RONA Dollars were
achieved or (Y) the number of Shares determined to be issuable under Section 2(b)
of this Agreement will be awarded (and the corresponding shares under Section 5
hereof will be issued) if:

 

(i)
Upon the Change in Control, the Recipient:

 

(A) Is not offered employment with the Surviving
Corporation (or is not allowed to continue his or her employment, if the
Surviving Corporation is Staples) in a position (1) in which the title,
employment duties and responsibilities, conditions of employment, and the level
of compensation and benefits are at least equivalent to those in effect during
the 90-day period immediately preceding the Change in Control and (2) that does
not involve a relocation of the Recipient’s principal place of employment of
more than 30 miles, or

 

(B) Does not accept (or continue) employment with the
Surviving Corporation (regardless of position, compensation or location);

 

(ii)
Within one year following the date of the Change in Control, the Recipient
either:

 

(A) Is discharged without Cause; or

 

(B) Resigns because his or her title or employment
duties and responsibilities are diminished, his or her conditions of employment
are adversely changed, the level of his or her compensation and benefits are
reduced, or his or her principal place of employment is relocated by more than
50 miles; or

 

(iii)
The Recipient continues to be employed by Staples or the Surviving Corporation
on the Vesting Date.

 

9.              Withholding
Taxes.  Staples’ obligation to
deliver the Shares shall be subject to the Recipient’s satisfaction of all
applicable federal, state and local income and employment tax withholding
requirements.  In the sole discretion of
Staples Board of Directors, the Recipient may surrender to Staples a number of
Shares sufficient to satisfy the Recipient’s tax withholding obligations.

 

10.       Deferral.  In
the sole discretion of the Staples Board of Directors, the Recipient may elect
to defer delivery of the Shares; provided, however, that any such deferral must
comply with the requirements of Section 409A of the Internal Revenue Code.

 

11.       Transferability.  This
Agreement may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of (whether by operation of law or otherwise) (collectively,
a “transfer”) by the Recipient, except that this Agreement may be transferred
by the laws of descent and distribution. 
The Recipient may only transfer Shares that may be issued pursuant to
this Agreement following the Vesting Date.

 

12.       Miscellaneous.

 

(a)  Except as provided herein, this Agreement may
not be amended or otherwise modified unless evidenced in writing and signed by
Staples and the Recipient unless the Board of Directors determines that the
amendment or modification, taking into account any related action, would not
materially and adversely affect the Recipient.

 

(b)  All notices under this Agreement shall be
mailed or delivered by hand to Staples at its main office, Attn: Secretary, and
to the Recipient to his or her last known address on the employment records of
Staples or at such other address as may be designated in writing by either of
the parties to one another.

 

(c)  This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]