Document:

exhibit_10-3.htm

Exhibit 10-3

 

MANPOWER INC.

(d/b/a ManpowerGroup)

 

Terms and Conditions Regarding the Grant of Awards

to Non-Employee Directors under the 2011 Equity Incentive Plan

 

(Amended and Restated Effective February 16, 2011)

 

	
1.  

	
Definitions

 

Unless the context otherwise requires, the following terms shall have the meanings set forth below:

 

	
(a)  

	
“Average Trading Price” shall mean, with respect to any period, the average of the Market Prices on the last trading day of each full or partial calendar quarter included within such period.

 

	
(b)  

	
An “Election Period” shall mean a period of time (i) beginning on January 1 of any year with respect to an individual serving as a Director as of that date and, with respect to an individual becoming a Director after January 1 of any year, the date the Director first becomes a Director and thereafter January 1 of any year and (ii) ending on (but including) the earlier of the date of termination of a Director’s tenure as a Director or the next succeeding December 31.

 

	
(c)  

	
“Equity Plan” shall mean the 2011 Equity Incentive Plan of Manpower Inc.

 

	
(d)  

	
“Retainer” shall mean the annual cash retainer and the additional cash retainer for committee chairs payable to a Director as established from time to time by the Board of Directors;  provided, however, that the term “Retainer” shall not include that portion of the annual cash retainer as to which a right exists to make an election under, or for which a prior election is in effect under, the Terms and Conditions Regarding the Grant of Options in Lieu of Cash Directors Fees to Non-Employee Directors Under 2011 Equity Incentive Plan of Manpower Inc. (the “Option Terms”) or the Procedures Governing the Grant of Options to Non-Employee Directors Under the 1994 Executive Stock Option and Restricted Stock Plan of Manpower Inc. (the “Option Procedures”).

 

Any capitalized terms used below which are not otherwise defined above will have the meanings assigned to them in the Equity Plan.

 

	
2.  

	
Right to Elect Deferred Stock in Lieu of Retainer.

 

At the beginning of each Election Period, a Director may elect to receive, in lieu of the Retainer to which he or she would otherwise be entitled for that Election Period, Deferred Stock granted in accordance with the following.  The election shall cover 50 percent, 75 percent or 100 percent of the Retainer payable to the Director for the Election Period.  To be effective, the election must be made by notice in writing received by the Secretary of the Company (i) on or before the December 31 immediately preceding the beginning of the Election Period for an individual serving as a on such date, and (ii) on or before the tenth business day after the date the Director becomes a Director for an individual becoming a Director during a calendar year.  Any such election made by a Director within 10 business days after becoming a Director shall only apply to that portion of the Retainer that is attributable to services performed by the Director subsequent to the date of the election.  The number of shares of Deferred Stock granted shall equal (i) the elected percentage of the amount of the Retainer payable to the Director for the Election Period to which the election relates (not including any portion of the Retainer attributable to services performed prior to the date of election for an electing Director who becomes a Director during the year), divided by (ii) the Average Trading Price for that Election Period (rounded to the nearest whole share).  Such Deferred Stock shall be granted, automatically and specifically without further action of the Board of Directors, on the first day immediately following the last day of such Election Period and will be fully vested on that date.

 

	
3.  

	
Annual Grant of Deferred Stock or Restricted Stock.

 

	
(a)  

	
Grant of Deferred Stock.  Each individual serving as a Director on the first day of each calendar year shall be granted on that day, automatically and specifically without further action of the Board of Directors, a number of shares of Deferred Stock equal to $105,000 divided by the Market Price on the last trading day of the immediately preceding year (rounded to the nearest whole share).  Such Deferred Stock shall vest in equal installments on the last day of each calendar quarter during the year in which granted.  Each individual becoming a Director during a calendar year shall be granted, automatically and specifically without further action of the Board of Directors, a number of shares of Deferred Stock equal to (i) $105,000 multiplied by a fraction, the numerator of which is the number of days after the date the Director becomes a Director through the next December 31, and the denominator of which is 365, (ii) divided by the Market Price on the last trading day prior to the date of grant (rounded to the nearest whole share).  The date of grant of such Deferred Stock shall be the date the Director becomes a Director.  Such Deferred Stock shall vest as follows:  on the last day of the calendar quarter during which the Director becomes a Director, a number of shares of such Deferred Stock shall vest equal to the total number of shares granted multiplied by a fraction, the numerator of which is the number of days after the date the Director becomes a Director through the last day of the quarter during which the Director becomes a Director, and the denominator of which is the number of days after the date the Director becomes a Director through the next December 31, and thereafter the balance of the shares of such Deferred Stock (if any) shall vest in equal installments on the last day of each remaining calendar quarter during the year.  Shares of Deferred Stock granted under this paragraph will not vest if the Director is no longer a member of the Board of Directors on the vesting date, and any shares of Deferred Stock held by a Director which remain unvested at the time the Director ceases to be a member of the Board of Directors shall be forfeited.

 

	
(b)  

	
Alternative Grant of Restricted Stock.  Instead of receiving a grant of Deferred Stock under this paragraph 3, a Director shall have the right to elect to receive a number of shares of Restricted Stock equal to the number of shares of Deferred Stock the Director would otherwise have been granted.  To be effective, such election must be made by notice in writing received by the Secretary of the Company (i) on or before December 31 of the immediately preceding year for an individual serving as a Director on the first day of any calendar year, and (ii) on or before the tenth business day after the date the Director becomes a Director for an individual becoming a Director during a calendar year.  Any such election to receive Restricted Stock made by a Director within 10 business days after becoming a Director during a calendar year shall only apply to that portion of the Deferred Stock the Director would otherwise have received that is attributable to services performed by the Director in and after the first full calendar quarter subsequent to the date of the election and subsequent calendar quarters during the same calendar year.  The date of grant of such Restricted Stock shall be the first day of the full calendar quarter beginning subsequent to the date of the election, and such Restricted Stock shall vest on the same basis as such Deferred Stock would have vested.  Where an election to receive Restricted Stock is made by a Director within 10 business days after becoming a Director during a calendar year, the Director shall receive a grant of Deferred Stock equal to that number of shares of Deferred Stock the Director would otherwise have received attributable to services performed by the Director between the date the Director becomes a Director and the last day of the calendar quarter in which the election is made.

 

	
4.  

	
Deferred Stock:  General Provisions

 

	
(a)  

	
Distribution of Shares.  The Company shall settle Deferred Stock granted under these Terms and Conditions in Shares.  Shares shall be distributed in respect of such Deferred Stock (but only to the extent vested, as rounded to the nearest whole Share) on the earlier of the third anniversary of the date of grant (the “Fixed Distribution Date”) or, upon a Director ceasing to be a member of the Board of Directors, within 30 days after the date of such cessation.  However, a Director holding Deferred Stock granted under these Terms and Conditions shall have the right to extend the Fixed Distribution Date (any such extended date or further extended date as provided below is also referred to below as the “Fixed Distribution Date”) by a period of five years or more for each such extension provided in each case the election to extend the Fixed Distribution Date is made by notice in writing delivered to the Secretary of the Company more than 12 months before the then existing Fixed Distribution Date.  Notwithstanding the foregoing, if a distribution of Shares under this paragraph would otherwise occur outside of a “Trading Window” (as defined in the Manpower Inc. Statement of Policy on Securities Trading), then the Company may delay the distribution of such Shares until the beginning of the next Trading Window.

 

	
(b)  

	
Dividends and Distributions.  On the first day of each calendar year, each Director shall be granted, automatically and specifically without further action of the Board of Directors, a number of shares of Deferred Stock equal to (i) the aggregate amount of dividends (or other distributions) which would have been received by the Director during the immediately preceding year if the Deferred Stock held by the Director (whether or not vested) on the record date of any such dividend or distribution had been outstanding common stock of the Company on such date, (ii) divided by the Average Trading Price for the preceding calendar year (rounded to the nearest whole share).  Notwithstanding the foregoing, a Director who ceases to be a member of the Board of Directors shall be granted, automatically and specifically without further action of the Board of Directors, on the day following the date of such cessation, a number of shares of Deferred Stock equal to (i) the total amount of dividends which would have been received by the Director during the year in which termination occurs if the Deferred Stock held by the Director (whether or not vested) on the record date of any such dividend had been outstanding common stock of the Company on such date, (ii) divided by the Average Trading Price for the period from January 1 of such year through the date of such cessation (rounded to the nearest whole share).  In the event of any distribution other than cash, the foregoing shall be applied based on the fair market value of the property distributed.  Additional shares of Deferred Stock granted under this subparagraph 4(b) shall be settled and Shares distributed in respect of such Deferred Stock at the same time as the Deferred Stock to which the dividends and distributions relate.

 

	
5.  

	
Other Provisions

 

	
a.  

	
These amended and restated Terms and Conditions shall become effective on February 16, 2011, and effective on that date shall supersede and replace the amended and restated Terms and Conditions Regarding the Grant of Awards to Non-Employee Directors under the 2011 Equity Incentive Plan in effect immediately prior thereto..

 

	
b.  

	
For the year 2011, the incremental amounts of annual grant, cash retainer and additional cash retainer for committee chairs resulting from the amendment and restatement of the Compensation for Non-Employee Directors Program effective on February 16, 2011 shall be prorated by multiplying the incremental amounts by a fraction the numerator of which is 319 (the number of days from and including February 16, 2011 through December 31, 2011) and the denominator of which is 365.

 

The resulting amounts for 2011 including prorated incremental amounts are:

 

	
Annual Grant

	  	
$104,370

	
Annual Cash Retainer

	  	
$  73,110

	
Additional Cash Retainer for Committee Chair

	  	  
	  	
Executive Compensation and Human Resources Committee Chair

	  	
$  14,370

	  	
Nominating and Governance Committee Chair

	  	
$  12,185

 

The grant date shall be February 16, 2011 for Deferred Shares or Restricted Shares granted in connection with the prorated incremental annual grant amount.

 

	
6.  

	
Application of Plan.

 

Except as otherwise provided in these Terms and Conditions, the Equity Plan shall apply to any Deferred Stock granted pursuant to these Terms and Conditions.ex10-1.htm

EXHIBIT 10.1

Sun Healthcare Group, Inc. Executive Bonus Plan

Effective January 1, 2011, annual incentive bonuses of senior management (“Executives”) of Sun Healthcare Group, Inc. (“Sun”), who are designated annually by the Compensation Committee of the Board of Directors of Sun (the “Committee”), shall be determined pursuant to this plan.  This plan is intended to provide bonuses that qualify for the performance-based compensation exemption of Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).  This plan is adopted under Section 5.1.4 and Section 5.2 of Sun’s 2009 Equity Incentive Plan (the “Plan”), and bonuses awarded under this plan shall be awards under the Plan that are subject to all of the terms and conditions of the Plan.

The incentive bonus (the “Bonus”) of an Executive for any fiscal year (the “Applicable Fiscal Year”) shall be based on two components:  achievement of the EBITDA target (which establishes the maximum amount of the Bonus (the “Maximum Bonus Amount”)) and a quality of care component, as described below.  The Bonus of each Executive cannot exceed his or her Maximum Bonus Amount.

1.           EBITDA.  Within the first ninety (90) days of the Applicable Fiscal Year, the Committee shall establish a target for Sun’s consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) and the target Bonus for each executive for the Applicable Fiscal Year.  EBITDA shall be measured using the normalized EBITDA of Sun as published by Sun in its press release announcing financial results for the Applicable Fiscal Year, which normalizing adjustments consist of prior period actuarial adjustments for self insurance for general and professional liability, EBITDA of discontinued operations, and nonrecurring costs related to acquisitions and other similar events, adjusted for discontinued operations and any change in accounting policies or practices.  To preserve (but not increase) the level of incentives intended, the Committee shall also adjust EBITDA to exclude the effect of any mergers and acquisitions.

An Executive’s Maximum Bonus Amount for the Applicable Fiscal Year shall be based upon normalized EBITDA (adjusted as set forth above) attained as a percentage of the target normalized EBITDA established for that year as follows (percentages in the tables are percentages of target Bonus):

	
 % of 

 Normalized

 EBITDA

 Target

 Achieved

	
85%

	
90%

	
95%

	
100%

	
105%

	
110%

	
115%

	
 % of 

 Target

 Bonus

 Funded

	
30%

	
50%

	
95%

	
100%

	
125%

	
150%

	
175%

If the actual normalized EBITDA (adjusted as set forth above) is less than 85% of target normalized EBITDA, no Bonus will be paid to any Executive.  If normalized EBITDA (adjusted as set forth above) exceeds 115% of target normalized EBITDA, each Executive’s Maximum Bonus Amount will equal the percentage of that Executive’s target Bonus set forth in the last

  

1

  

column of the table above.  If normalized EBITDA (adjusted as set forth above) is greater than the percentage of target normalized EBITDA shown in one column but less than the percentage shown in the adjacent column, the Executive’s Maximum Bonus Amount will equal the percentage of the Executive’s target Bonus determined on a straight-line basis between the percentages shown in the applicable columns of the table.

In no case, however, shall the Maximum Bonus Amount of any Executive exceed (i) the amount that has been accrued for such Bonus in the calculation of normalized EBITDA and (ii) the applicable limit set forth in Section 5.2.3 of the Plan.

2.           Quality of Care.

The Committee may, within the first 90 days of an Applicable Fiscal Year, designate one or more Executives (“Designated Executives”) whose final Bonus determination will be subject to a quality of care component based on the Committee’s assessment of data relating to quality of care for the corresponding Applicable Fiscal Year, as described below.  The amount of the quality of care component of a Designated Executive’s Bonus opportunity shall equal 20% of the Executive’s Maximum Bonus Amount for that year.  Some or all of the Executives may be Designated Executives.  Executives who are not Designated Executives shall be entitled to receive a Bonus equal to their Maximum Bonus Amount.

After conclusion of the Applicable Fiscal Year, the Committee shall review the quality of care data and, based on such review, determine, in its discretion whether to award to each Designated Executive the full amount of the quality of care component of his or her Maximum Bonus Amount for that year or a lesser amount.  In assessing such data, the Committee shall have complete discretion to consider what it deems relevant to the performance of the Designated Executive with respect to quality of care, including data supplied by third parties, such as PointRight, Inc. or another independent reporting organization, and internally generated data.

If the Committee determines to award a Designated Executive less than the full amount of his or her quality of care component of the applicable Maximum Bonus Amount for that particular year, the Executive’s Bonus for that year will be up to 20% less (corresponding to the 20% quality of care component) than the Executive’s Maximum Bonus Amount for that year, with the final Bonus amount within this range as determined by the Committee in its discretion.  For example, if the Committee, after conclusion of the Applicable Fiscal Year, determines that only 90% of a Designated Executive’s quality of care component has been earned (i.e. 18% of the Maximum Bonus Amount), the Designated Executive will receive a Bonus equal to 98% of his or her Maximum Bonus Amount.

3.           Committee Certification and Timing of Payment.  As soon as practicable after the end of the Applicable Fiscal Year, the Committee shall determine the amount of Sun’s normalized EBITDA for such year, the Maximum Bonus Amount for each Executive, any appropriate reductions to Maximum Bonus Amounts for Designated Executives with respect to that year, and the final Bonus amounts.  No Bonus shall be paid to an Executive for the Applicable Fiscal Year unless and until the Committee has certified, by resolution or other appropriate action in writing, the normalized EBITDA earned by Sun, the normalized EBITDA earned by Sun (and any applicable adjustment as set forth above) as a percentage of the target normalized EBITDA (as

  

2

  

so adjusted) and the amount of the Bonus earned by each Executive.  Any Bonuses shall be paid to each Executive as soon as practicable after completion of the year-end audit for the Applicable Fiscal Year and following the Committee’s certification described above  (but in no event later than March 15 of the calendar year following the Applicable Fiscal Year to which the Bonus relates).

4.           Recoupment of Bonus Payments.  A Bonus paid to an Executive is subject to recoupment, to the extent determined to be appropriate by the Committee, if each of the following circumstances occur: (1) the amount of the Bonus was calculated based on the achievement of normalized EBITDA, the calculation of which was based on financial statements that are subsequently the subject of an accounting restatement due to noncompliance with any financial reporting requirement under the securities laws; (2) fraud or intentional misconduct by any Executive, or any officer or employee that reports to an Executive was a significant contributing factor to such noncompliance; and (3) the restated financial statements are issued and completed prior to the issuance and completion of the financial statements for the third fiscal year following the Applicable Fiscal Year to which the Bonus relates.  In such circumstances, a Bonus will be subject to recoupment only to the extent a lesser Bonus would have been paid to an Executive based upon normalized EBITDA, as restated, and only as to the net amount of such portion of the Bonus after reduction for the Executive’s tax liability on that portion of the Bonus.  By accepting a Bonus, each Executive agrees to promptly make any Bonus reimbursement required by the Committee in accordance with this section, and that Sun and its affiliates may deduct from any amounts owed to the executive from time to time (such as wages or other compensation) any amounts the Executive is required to reimburse Sun pursuant to this section.  This section does not limit any other remedies Sun or its affiliates may have available in the circumstances, which may include, without limitation, dismissing the executive or initiating other disciplinary procedures.  The provisions of this section are in addition to (and not in lieu of) any rights to repayment Sun or its affiliates may have under Section 304 of the Sarbanes-Oxley Act of 2002 and similar provisions of other applicable law, any of which could in certain circumstances require repayment or forfeiture of any award under this plan.

5.           Administration.  This plan shall be administered by the Committee, which shall consist solely of two or more members of the Board of Directors of Sun who are “outside directors” within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m).  The Committee shall have the same administrative authority with respect to this plan as provided for under the Plan.

6.           Section 162(m).  This plan is intended to provide bonuses that qualify for the performance-based compensation exemption of Section 162(m) that are not subject to any tax, penalty or interest.  This plan shall be construed and interpreted consistent with such intent.

  

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