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Executive Incentive Compensation Plan - Inc.


AMENDED AND RESTATED EXECUTIVE INCENTIVE COMPENSATION PLAN, Inc. (the "Company") adopted its Executive Incentive Compensation Plan effective beginning January 1, 2008, as amended and restated effective July 1, 2008, January 1, 2009 and July 27, 2009. The Company adopted this Amended and Restated Executive Incentive Compensation Plan (the "Plan") effective beginning February 8, 2010. The Plan is designed to allow employees to share in Company achievements based on attainment of pre-established, corporate financial performance and individual performance goals. The Plan is designed to motivate and reward select employees whose performance is critical to the overall success of the Company.

Eligibility and Plan Year

Plan eligibility is limited to Managers and above, subject to the annual review and approval of Company management. Employees who participate in a Company sales compensation program are not eligible for the Plan. Eligibility is not automatic. A participant must be nominated by their supervisor with concurrence of the next level of management, as appropriate. Eligible employees must be employed at the end of the payment period (quarter or year) to be eligible to receive a payment under the Plan.

The Plan is annual, January 1 through December 31, with achievement measured and incentive awards paid on a quarterly basis.

Elements of the Plan

Each eligible employee has a target incentive award, calculated as a specified percentage of that employee153s annual salary. The incentive award amount will be based upon two components: (1) achievement by the Company of its financial goals, and (2) achievement by the individual employee of his or her management by objective ("MBO") goals.


Employees will be eligible for an incentive award tied wholly or partially to overall Company performance (the "Company Portion").


The remainder of each eligible employee153s target incentive award, if applicable, will be based upon his or her individual MBO goals (the "MBO Portion").


The Company Portion generally will be a larger percentage of the overall target incentive award for more senior employees, who have a greater influence on Company results. The Company will establish and may, in its discretion, adjust the percentages of a participant153s overall target incentive award attributable to the Company Portion and the MBO Portion.


A partial incentive award shall be paid for partial achievement of financial goals or individual MBO goals on a pro-rata basis. An employee may also receive either the Company Portion or the MBO Portion if one portion is earned but not the other.

The Company Portion

The Company will approve financial performance goals in advance for the periods to which the Plan will tie. Financial goals may be defined by quarter, semi-annually or annually. The Company may revise those financial performance goals at any time in its discretion. The Company Portion of the incentive award is earned only at the close of the period to which it relates and only if the performance goals are achieved as determined by the Company in its discretion. In order to be eligible for an incentive award, a participant must be an active, full-time employee of the Company on the last day of the period for which the incentive award is earned.

For awards under the Amended and Restated Plan, the Company currently expects to select Company financial goals, if applicable, that consist of one or more measurable performance objectives based on specified levels of or growth in one or more of the following criteria:


Revenue and Sales Growth metrics;


Profit, including Earnings Per Share;


Margin, including Gross Margin and Operating Margin;


Cash and balance sheet metrics;


Cost of Goods Sold (COGS) and related efficiency metrics;


Operating Expenses and efficiency metrics;




Working Capital;


Non-GAAP financial measures; and


Liquidity Measures.

Company financial goals may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual participant or of a subsidiary, division, department, region or function within the Company or subsidiary in which the participant is employed. The Company financial goals may be made relative to the performance of other companies.

If the Company exceeds its pre-established annual financial objectives according to guidelines set by the Company, then an employee may be eligible to receive an incentive award that is greater than 100% of his or her target amount, according to a pre-defined formula for business over-achievement determined by the Company. Over-achievement may be capped in an amount determined by the Company in its discretion. Eligible employees must be employed at the end of the period to be eligible to receive any incentive award payment for over-achievement.

The MBO Portion

Within the first two weeks of each quarter of the Company153s fiscal year, the employee and their supervisor will jointly prepare and agree upon written MBO performance goals for that quarter. In appropriate cases, MBOs may extend over more than one quarter. These goals would in turn be approved by the supervisor153s manager and then submitted to Human Resources. MBOs should be specific, measurable, attainable, realistic, and timely. MBO goals that are chosen for Plan participants consist of both quantifiable and non-quantifiable performance objectives based on criteria that can be both measured and defined by the Company in advance of the performance period. They should define what the employee is going to do and how it will be achieved and measured, with quantifiable outcomes and expected completion dates. MBOs should stretch employees outside their normal job responsibilities. MBOs may consist of both team and individual objectives. MBO goals are generally derived from the following categories: business performance; operational efficiencies; strategic initiatives; account development and organizational effectiveness. To the extent possible and consistent with the employee153s job description, the performance goals shall be based on objective criteria. However, certain subjective criteria (such as "working well with co-workers") will necessarily be included in the goals.

Each individual MBO will be weighted as a percentage of the total MBO Portion for the quarter and will be assigned a proportionate dollar award value. MBOs are evaluated quarterly and any incentive award payments for achievement will be calculated quarterly. If there is a threshold of achievement for a given MBO, the employee must meet that threshold in order for any incentive award to be paid. Each MBO may be treated differently in terms of threshold for payments. For example, some MBOs may require an achievement of 80% or better, while others may not have a minimum threshold of achievement.

The MBO Portion will be earned only upon completion of the employee153s quarterly performance review demonstrating that the employee has achieved his or her performance goals during the course of the quarter.

Eligibility and Payments to Participants

In order to be eligible for an incentive award, a participant must be an active, full-time employee of the Company on the last day of the quarter or year for which the incentive award is earned. If a participant153s employment terminates prior to the end of the quarter, the employee will not have earned any portion of the incentive award and therefore will not be entitled to any portion of the incentive award. The Company may make exceptions to this requirement in the event of an employee153s death or disability, as determined by the Company in its sole discretion. Eligible employees who terminate employment for any reason after the end of the applicable quarter will be entitled to full payment of any earned incentive award on the date fixed for payment.

New hires who are approved for inclusion into the plan, but become full time regular employees after the beginning of the quarter will not receive an award for their initial quarter of service. Exceptions will be made only with approval of the CEO or his designee.

Employees approved for inclusion in the plan arising from promotion and/or transfer after the start of the quarter will not receive an award for their initial quarter in their new role. Exceptions will be made only with approval of the CEO or his designee. However, if already in the plan, they will be eligible for full participation in their previous position153s rate based upon that position153s metrics.

Awards shall be paid by check less applicable taxes pursuant to the Company153s normal payroll policies and procedures, after the quarterly corporate performance results are available and certified by the Board of Directors and employee performance against MBO goals is determined. All appropriate taxes will be deducted and withheld from the award payment, as required by federal, state and/or local laws.

The existence of, or an employee153s eligibility for, this Plan shall not be deemed to give the participant the right to be retained in the employ of the Company nor will the Plan, or rights thereunder, interfere with the rights of the Company to discharge any participant at any time. The Plan will not be deemed to constitute a contract of employment with any participating employee, nor be deemed to be consideration for the employment of any participant.

The Plan, as set forth in this document, represents the general guidelines the Company presently intends to utilize to determine what incentive awards, if any, will be paid. If, however, at the sole discretion of the Company, the Company153s best interest is served by applying different guidelines in special or for unusual circumstances, it reserves the right to do so by notice to such individuals at any time. The Company reserves the right to amend or discontinue this Plan at any time in the best interests of the Company. Without in any way limiting the foregoing rights of the Company, should a material acquisition, disposition or change in corporate control occur during the Plan period, the Company reserves the right to amend or discontinue the Plan following such event in such manner as the Company, in its sole discretion, deems appropriate.

The Company shall have full power and authority to interpret and administer the Plan and shall be the sole arbiter of all manners of interpretation and application of the Plan and the Company153s determination shall be final. Any inconsistencies that may occur between the Plan provisions and the calculation of the incentive results will be interpreted and resolved on an individual basis by the Company.

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