(a) earnings (either in the aggregate or on a per-share basis (“EPS”), reflecting dilution of shares as the Committee deems appropriate and, if the Committee so determines, net of or including dividends or net of or including the after-tax cost of capital) before or after interest and taxes (“EBIT”) or before or after interest, taxes, depreciation and amortization (“EBITDA”); (b) pre-tax operating earnings after interest and before incentives, service fees and extraordinary or special items; (c) earnings growth or growth in EPS; (d) EPS from continuing operations, operating earnings, growth in operating earnings; (e) value of assets; (f) economic value added (net operating profit after tax minus the product of capital multiplied by the cost of capital); (g) operating margin, pre-tax operating margin, or operating efficiency; (h) operating profits; (i) operating or administrative expenses; (j) net income or net operating income; (k) operating cost management; (l) gross or net revenue, changes in annual revenues; (m) revenue per associate, revenue per full time employee (“FTE”), revenue per square foot or other real estate measure; (n) same store sales, or comparable store sales, or total sales levels; (o) cash flow(s) (including either operating or net cash flows or free cash flows); (p) cash flow on investment; (q) financial return ratios; (r) total shareholder return, shareholder return based on growth measures or the attainment by the shares of a specified value for a specified period of time, share price or share price appreciation; | (s) dividends; (t) net worth; (u) return measures, including return or net return on assets, net assets, equity, capital, gross sales, committed capital, or invested capital; (v) adjusted pre-tax margin; (w) pre-tax profits or gross profits; (x) volume, market share or market penetration with respect to specific designated products or product groups and/or specific geographic areas; (y) aggregate product price and other product measures; (z) expense or cost levels, in each case, where applicable, determined either on a Company-wide basis or in respect of any one or more specified divisions or products; (aa) reduction of losses, loss ratios, or expense ratios; (bb) reduction in fixed costs; (cc) cost of capital, working capital targets, or change in working capital; (dd) debt reduction; (ee) productivity measures; (ff) average inventory turnover or inventory controls, on-shelf availability, inventory metrics, asset quality; (gg) satisfaction of specified business expansion goals or goals relating to acquisitions or divestitures; (hh) regulatory ratings; (ii) customer satisfaction based on specified objective goals or a Company-sponsored customer survey; (jj) employee diversity goals; (kk) supplier diversity goals; (ll) employee turnover; (mm) attraction of employees; (nn) specified objective social goals; (oo) safety record; or (pp) business integration. |
(a) | Committee to Establish Basis for Awards. In connection with the grant of an Incentive Plan Award, for each Performance Period, the Committee shall establish the Performance Goal(s) and the Performance Measure(s) applicable to such Incentive Plan Award, and shall either: |
(i) | establish the formula for determining the amounts payable based on the level of achievement of the applicable Performance Goal; or |
(ii) | for any one or more Participants, subject to Section 4.2(a), establish a formula for determining the maximum amount payable (an “umbrella plan”) based on the level of achievement of the applicable Performance Goal, and set a methodology for determining the actual amount payable (a “plan within a plan”) which may, but need not, be based on Performance Measures; or |
(iii) | for any two or more Participants (“Pool Participants”), establish a performance award pool, which shall be an unfunded pool, the aggregate amount of which shall be based upon the achievement of the Performance |
(iv) | With respect to each Incentive Plan Award, the Committee shall: (A) determine the consequences for the Incentive Plan Award of the Participant’s change in employment status as provided in Section 4.2(b); (B) specify the consequences for the Award of the occurrence of a change in control of the Employer during a Performance Period; and (C) establish such other terms and conditions for the Incentive Plan Award as the Committee deems appropriate. |
(v) | For Incentive Plan Awards intended to qualify for the Section 162(m) Exemption, each of the foregoing shall be accomplished within the time period required to qualify for the Section 162(m) Exemption. With respect to Participants who are not Potential Covered Employees, and for Incentive Plan Awards not intended to qualify for the Section 162(m) Exemption, the Committee may establish other subjective or objective goals, including individual Performance Goals, as it deems appropriate, which need not be based on Performance Measures. |
(b) | Certification of Performance Goal Achievement. The Committee shall, promptly after the date on which the necessary financial, individual, or other information for a particular Performance Period becomes available, and in any event prior to the payment of any Incentive Plan Award intended to qualify for the Section 162(m) Exemption to a Covered Employee, determine and certify the degree to which each of the Performance Goals has been attained. |
(c) | Permitted Adjustments. Except as permitted under Section 4.2, Incentive Plan Awards shall be paid solely in accordance with the applicable formula or umbrella plan or the pool for the Performance Period, based upon the level of achievement of Performance Goals. Performance Goals, to the extent determined based on accounting standards or principles, shall be based upon generally accepted accounting principles, or international financial accounting standards, as applicable. However, unless the Committee specifies otherwise within the time period required to qualify for the Section 162(m) Exemption, Performance Goals shall be adjusted by the Committee to take into account the effect of the following, to the extent the adjustment items exceed thresholds for adjustment established by the Committee when the Performance Goals are established: changes in accounting standards that may be required by the Financial Accounting Standards Board after the Performance |
(a) | Maximum Incentive Plan Award. In no event will an Incentive Plan Award for a Covered Employee intended to qualify for the Section 162(m) Exemption exceed $20,000,000 for a 12-month Performance Period (or in the case of a Performance Period other than 12 months long, an amount that bears the same ratio to $20,000,000 as the length of the Performance Period bears to 12 months). |
(b) | Change in Employment Status. The Committee shall have the discretion and authority to determine the consequences for the Incentive Plan Award of a Participant’s: (i) termination of employment for various reasons or the Participant’s disability, or the Participant’s demotion or promotion during the Performance Period; (ii) leaving the Employer and being rehired as a Participant; (iii) being hired, promoted, or transferred into a position eligible for MIP participation; (iv) transferring between eligible MIP positions with different incentive percentages or Performance Goals; (v) transferring to a position not eligible to participate in the MIP; (vi) becoming eligible for an incentive from another incentive plan maintained by the Company or Related Affiliate; (vii) being on a leave of absence; and (viii) similar circumstances deemed appropriate by the Committee, consistent with the purpose and terms of the MIP; provided however, that the Committee shall not be authorized to increase the amount of the Incentive Plan Award payable to a Covered Employee that is intended to qualify for the Section 162(m) Exemption. If a Participant is on administrative suspension at the time payment would otherwise be made, no payment shall be made until the matter is resolved by the Employer, and it is determined whether the Incentive Plan Award shall be paid or forfeited. |
(c) | Committee Discretion. The Committee shall have the discretion to reduce, eliminate, or increase any Incentive Plan Award for any individual or group, to reflect individual performance and/or unanticipated factors, including but not limited to those described in Section 4.1(c), or in the case of a plan within a plan, to implement the methodology for determining the actual amount of a Participant’s Incentive Plan Award. Notwithstanding the foregoing, and subject to the following sentence, with respect to the Incentive Plan Awards of Potential Covered Employees intended to qualify for the Section 162(m) Exemption, the Committee shall not increase such awards above the amount determined under the applicable formula, umbrella plan, or pool for the Performance Period, or (except in case of death or a change in control) waive the achievement of applicable Performance Goals. In the event a Potential Covered Employee is determined at the end of the Performance Period not to be a Covered Employee, and to the extent it would not cause the Potential Covered Employee to become a Covered Employee, the Committee may exercise its discretion to increase the amount of such Potential Covered Employee’s Incentive Plan Award above the amount generated under the applicable formula for the Performance Period. |
(a) | Usual Timing. For any recipient subject to U. S. federal income tax, unless payment of the Incentive Plan Award is duly deferred by the Participant under an applicable deferred compensation arrangement, Incentive Plan Awards will be paid by the Participant’s Employer in cash or cash equivalent no later than two and one-half months after the later of (a) the end of the calendar year in which the applicable Performance Period ends or (b) the end of the Fiscal Year in which the Performance Period ends. The Committee may establish different payment schedules for different Participants. Notwithstanding the foregoing, it is contemplated that for any Performance Period ending on January 31, payment to recipients subject to U. S. federal income tax will be made by the following April 15. If any portion of an Incentive Plan Award payable to a Covered Employee that is intended to qualify for the 162(m) Exemption for any reason is not deductible under Section 162(m), payment of that portion shall, in the Committee’s discretion, be deferred until the earliest date it may be paid and deducted. |
(b) | Certain Participants not Eligible. To be eligible for payment of any Incentive Plan Award, the Participant must (i) be employed by the Company or a Related Affiliate on the last day of the Performance Period to which the Incentive Plan Award pertains, except that in the event of a Participant’s death, the Incentive Plan Award shall be prorated based upon the number of full payroll periods worked as a Participant during the Performance Period prior to death, (ii) have performed the Participant’s duties to the satisfaction of the Committee, (iii) have not engaged in any act deemed by the Committee to be inimical to the best interest of the Company or a Related Affiliate, (iv) have not breached any restrictive covenant or confidentiality requirement to which the Participant is subject, and (v) otherwise have complied with Company and |
(c) | Recoupment. If the Committee determines within twelve months following the date an Incentive Plan Award is paid (i) that the Participant, prior to the date of payment of such Incentive Plan Award, (A) engaged in any act the Committee deems inimical to the best interest of the Company or a Related Affiliate, or (B) violated any of the requirements of Section 4.3(b), or (ii) that the Participant, whether before or after payment of such Incentive Plan Award failed to comply with Company and Employer policies, the recipient of the Incentive Plan Award shall be obligated, upon demand, to return the amount of such Incentive Plan Award to the Employer that paid it. In addition, all Incentive Plan Awards, whether or not previously paid, and whether or not previously deferred, shall be subject to the Company’s policies or requirements or applicable law (including regulations and other applicable guidance) regarding clawbacks (recoupment) as in effect from time to time. |
(a) | Allocation. Except to the extent prohibited by applicable law (including regulations and other applicable guidance) or the applicable listing standards of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members. |
(b) | Delegation; Sub-Plans. Provided that the Committee shall not delegate authority or responsibility for Incentive Plan Awards of Potential Covered Employees intended to |
(c) | Revocation. The Committee may at any time revoke any allocation or delegation. |
(a) | Amendment and Termination. The Board may at any time amend or terminate the MIP (in whole or in part) without the approval of the shareholders of the Company, except as otherwise provided in this Section 6.1. Neither the Company nor any Related Affiliate is obligated to continue this MIP. |
(b) | Shareholder Approval. Any amendment to the MIP that changes the class of associates of an Employer eligible to participate, changes the Performance Goals, Performance Measures, or increases the maximum dollar amount that may be paid to a Participant for a Performance Period shall not be effective with respect to Incentive Plan Awards to Covered Employees intended to qualify for the Section 162(m) Exemption unless the amendment is approved by shareholders as provided in Section 1.3 before the Incentive Plan Award is paid. |
(a) | Not Taken into Account Under Other Plans. Awards shall not be considered eligible pay under other plans, benefit arrangements, or fringe benefit arrangements of the Company or a Related Affiliate, unless otherwise provided under the terms of other plans. |
(b) | Compensation Reduction and Compensation Deferral Elections Apply to Incentive Plan Awards. To the extent provided in the applicable benefit or deferred compensation plan or arrangement of the Company or a Related Affiliate, amounts payable as Incentive Plan Awards will be reduced or deferred in accordance with the Participant’s compensation reduction election or compensation deferral election, if any, in effect under other plans and arrangements at the time the Incentive Plan Award is paid. |
(c) | Sole Incentive Plan. Unless determined otherwise by the Committee, associates shall not be eligible to participate in the MIP for any period they are participating in any other incentive program maintained by the Company or any Related Affiliate. |
(a) | Withholding. The Participant’s Employer shall have the right to deduct from all payments made under the MIP any federal, state, or local taxes required by law to be withheld with respect to the payments. |
(b) | Section 409A. The MIP is intended to comply with, or be exempt from, Section 409A of the Internal Revenue Code of 1986 (“Section 409A”) and, accordingly, to the maximum extent permitted, the MIP shall be construed and interpreted in accordance with such intent. If payment of any amount of “deferred compensation” (as defined under Section 409A, after giving effect to the exemptions thereunder) is triggered by a separation from service (as defined under Section 409A) that occurs while the Participant is a “specified employee” with respect to the Company (as defined under Section 409A), and if such amount is scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 15 days after the appointment of the personal representative or executor of the Participant’s estate following the Participant’s death. |
(c) | Participant Solely Responsible. Notwithstanding the foregoing, the Participant shall be solely responsible for the satisfaction of any federal, state, local, or foreign taxes on payments under the MIP. By way of example and not limitation, in no event whatsoever shall the Company be liable for any additional tax, interest, or penalties that may be imposed on the Participant by Code Section 4999 (golden parachute payments) or by Code Section 409A or any damages for failing to comply with Code Section 409A |