{"id":38529,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/annual-incentive-plan-navarre-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"annual-incentive-plan-navarre-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/annual-incentive-plan-navarre-corp.html","title":{"rendered":"Annual Incentive Plan – Navarre Corp."},"content":{"rendered":"
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<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n<\/blockquote>\n

Annual Incentive Plan <\/em><\/strong><\/p>\n

Fiscal Year 2012 <\/em><\/strong><\/p>\n

Effective April 1, 2011 : March 31, 2012 <\/em><\/p>\n

\n

Contents <\/u><\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

I.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Purpose of the Plan<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

II.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Eligibility<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

III.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Administration<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

IV.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Plan Design<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

V.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Financial Objectives<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

VI.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Individual Objectives<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

VII.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Incentive Payments<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

VIII.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Amendment, Suspension and Termination<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

IX.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Unfunded Plan<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

X.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Other Benefit and Compensation Programs<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

XI.<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Governing Law<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Exhibit I:<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Apportionment of Bonus Plan Objectives<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Exhibit II:<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Payout Schedule for Sales Objective<\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/tr>\n
\n

Exhibit III:<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Payout Schedule for EBITDA Objective<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Page 2 of 10<\/p>\n

\n\n\n\n
\n

I.<\/strong><\/p>\n<\/td>\n

\n

Purpose of the Plan <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The purpose of the Annual Incentive Plan is to align all participants with
\nthe business objectives of Navarre Corporation and its subsidiaries (the
\n“Company”) by motivating, rewarding and recognizing participants for their
\nachievements and contribution to the Company153s success.<\/p>\n

The proposed plan is intended to stimulate and reward
\nparticipants to implement and achieve revenue growth. <\/em><\/strong><\/p>\n\n\n\n
\n

II.<\/strong><\/p>\n<\/td>\n

\n

Eligibility <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Most management-level employees of the Company are eligible to participate in
\nthe Plan. New hires must be employed prior to October 1st to be eligible for a
\npro-rata incentive payment for that fiscal year. Participants that terminate
\nfrom the company, for any reason, prior to the date of the incentive payment,
\nwill lose their eligibility to receive an incentive payment.<\/p>\n\n\n\n
\n

III.<\/strong><\/p>\n<\/td>\n

\n

Administration <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan is administered by the Compensation Committee of the Company153s Board
\nof Directors (the “Compensation Committee”). The Chief Executive Officer of the
\nCompany (the “CEO”) will make recommendations to the Compensation Committee
\nregarding participation, level of awards, changes to the Plan, financial
\nobjectives, and other aspects of the Plan153s administration. The Compensation
\nCommittee has the authority to interpret the Plan, and, subject to the Plan153s
\nprovisions, to make and amend rules and to make all other decisions necessary
\nfor the Plan153s administration. Any decision of the Compensation Committee in the
\ninterpretation and administration of the Plan shall lie within its sole and
\nabsolute discretion and shall be final, conclusive and binding on all parties
\nconcerned. Specifically, the Compensation Committee has the authority to approve
\npayout percentages and to approve individual awards, including discretionary
\nawards, for the executive officers. The CEO has the authority to approve
\nindividual awards, including discretionary awards, for other participants
\nconsistent with the Plan.<\/p>\n\n\n\n
\n

IV.<\/strong><\/p>\n<\/td>\n

\n

Plan Design <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Annual Incentive Plan has up to three components:<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Financial Objectives<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Sales Objectives<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Individual Objectives<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Page 3 of 10<\/p>\n

\n

The potential bonus payout is based on a participant153s level and type of
\nposition and is determined as a percentage of the participant153s base salary
\napportioned between the components. The senior leadership team comprised of the
\nCEO, COO\/CFO, division presidents and corporate vice presidents will earn a
\nbonus based on two components: Financial Objectives and Sales Objectives.
\nDivision vice presidents, directors, and managers will earn a payout based on
\nthree components: Financial Objectives, Sales Objectives, and Individual
\nObjectives. The apportionment is summarized in Exhibit I.<\/p>\n

The annual “Bonus Pool” is the amount of money available for payout of
\nbonuses as determined by the Compensation Committee based upon the aggregate
\nbonus potential of all participants and the extent to which the objectives have
\nbeen achieved.<\/p>\n\n\n\n
\n

V.<\/strong><\/p>\n<\/td>\n

\n

Financial Objectives <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The following Financial Objectives are measured based on attainment of
\nspecific levels of performance of the Company (or of a subsidiary, division, or
\ndepartment thereof):<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Consolidated EBITDA Target of $18.2 M, before the Bonus Pool and severance
\naccruals,<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

Consolidated Sales Target of $519 M.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

For participants that are employees of a subsidiary of Navarre Corporation,
\nthe EBITDA and Sales components will be based upon a subsidiary specific target.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

For subsidiary performance above threshold but below target, the bonus payout
\nwill be reduced proportionately.<\/p>\n\n\n\n
<\/td>\n\n<\/td>\n<\/td>\n\n

The performance thresholds for the objectives payout will be attainment of
\n80% or greater for EBITDA and 90% or greater for sales. Payment will be on a
\nsliding scale. See Exhibits II and III.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Threshold <\/u><\/em><\/p>\n

A financial objective threshold must be attained before any bonus is earned
\n(other than a discretionary pool payout, if approved). This threshold is 80% of
\nthe Consolidated EBITDA Target: $14.5 M.<\/p>\n

Growth Pool <\/u><\/em><\/p>\n

If Consolidated EBITDA exceeds the EBITDA Target, the Bonus Pool will be
\nincreased by 25% of the amount that Consolidated EBITDA exceeds the EBITDA
\nTarget.<\/p>\n

Page 4 of 10<\/p>\n

\n

Participants will share in the enhanced Bonus Pool on a pro-rata basis,
\nsubject to the maximum payment provision in Paragraph VII herein. This provides
\nan enhanced incentive payout opportunity to participants which would be funded
\nthrough improvement in Consolidated EBITDA beyond targeted amounts.<\/p>\n\n\n\n
\n

VI.<\/strong><\/p>\n<\/td>\n

\n

Individual Objectives <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Goal Setting <\/u><\/em><\/p>\n

Plan participants and their managers will share accountability for
\nestablishing annual goals for the Individual Objectives component of the
\nincentive plan. Generally, participants will have a number of specific and
\nmeasurable goals which may be weighted or prioritized. These goals should tie
\ndirectly to the overall company, subsidiary, or department goals. Joint
\nagreement on goals will be confirmed with signatures of the participant and
\nhis\/her manager. These goals must be provided to Human Resources within two
\nmonths of becoming eligible for the Annual Incentive Plan.<\/p>\n

Goal Monitoring <\/u><\/em><\/p>\n

Participants will normally meet with their managers at least quarterly to
\nreview progress on the established goals.<\/p>\n

Goal Modification <\/u><\/em><\/p>\n

Goals may be modified during the plan year if the business or the
\nindividual153s position requires the change. If the goals of a Named Executive
\nOfficer are adjusted, approval by the Compensation Committee of the Board of
\nDirectors is required.<\/p>\n

Goal Measurement <\/u><\/em><\/p>\n

Plan participants and their managers will discuss the participant153s goal
\nachievement on their Individual Objectives and managers must submit the
\nachievement to HR for approval in a timely manner. The Compensation Committee
\nwill evaluate and determine achievement of the CEO153s individual performance and
\nreview the achievement for the other executive officers.<\/p>\n\n\n\n
\n

VII.<\/strong><\/p>\n<\/td>\n

\n

Incentive Payments <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Results and Adjustments <\/u><\/em><\/p>\n

Actual business results for the fiscal year will be provided by the Chief
\nFinancial Officer and approved by the Compensation Committee. The Compensation
\nCommittee may<\/p>\n

Page 5 of 10<\/p>\n

\n

approve adjustments to actual business results to reflect organizational,
\noperational, or other changes which have occurred during the year, e.g.,
\nacquisitions, dispositions, expansions, contractions, material non-recurring
\nitems of income or loss, extraordinary items, effects of accounting changes or
\nother events.<\/p>\n

Discretionary Pool <\/u><\/em><\/p>\n

The Compensation Committee has determined that a discretionary pool should
\nalso be established to reward participants in the plan with exemplary
\nperformance. The maximum amount of the discretionary pool is $500,000, which may
\nor may not be awarded in whole or in part.<\/p>\n

Payments <\/u><\/em><\/p>\n

Payments under the Plan will normally be paid within 45 days of the
\nconclusion of the Company153s annual audit by its certified public accountants.
\nPayment will be made for the number of full months that the participant held a
\nqualifying position during the plan year and amounts paid will be taxed in
\ncompliance with Internal Revenue Service guidelines for bonuses. Checks for
\nbonus payments will normally be hand delivered in one-on-one meetings by the
\nparticipant153s manager.<\/p>\n

Maximum Payment <\/u><\/em><\/p>\n

Notwithstanding anything to the contrary provided in this Plan, payouts to
\nany one participant will not exceed 150% of the participant153s target bonus.<\/p>\n

Communication <\/u><\/em><\/p>\n

After year-end closing, managers should meet individually with each
\nparticipant to communicate the final achievement on specific goals and
\ncommunicate the incentive payment amount. Human Resources will prepare a
\ncommunication document to assist managers to effectively communicate this
\ninformation.<\/p>\n\n\n\n
\n

VIII.<\/strong><\/p>\n<\/td>\n

\n

Amendment, Suspension and Termination <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Compensation Committee or the Board of Directors may at any time, and
\nwithout prior notice, terminate, suspend, amend or modify this Plan or any
\nincentive payments under the Plan not yet paid. No payments pursuant under this
\nPlan will be made during any suspension of the Plan or after its termination.\n<\/p>\n

Page 6 of 10<\/p>\n

\n\n\n\n
\n

IX.<\/strong><\/p>\n<\/td>\n

\n

Unfunded Plan <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The Plan is unfunded and the Company shall not be required to segregate any
\nassets for incentive payments under the Plan.<\/p>\n\n\n\n
\n

X.<\/strong><\/p>\n<\/td>\n

\n

Other Benefit and Compensation Programs <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Payments received by a participant under this Plan shall not be deemed a part
\nof a participant153s regular, recurring compensation for purposes of the
\ntermination, indemnity or severance pay law of any state and shall not be
\nincluded in, nor have any effect on, the determination of benefits under any
\nother employee benefit plan, contract or similar arrangement provided by the
\nCompany unless expressly so provided by such other plan, contract or
\narrangement. Nothing in the Plan shall be construed as a contractual payment
\nobligation or guarantee of employment for any participant.<\/p>\n\n\n\n
\n

XI.<\/strong><\/p>\n<\/td>\n

\n

Governing Law <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

To the extent that Federal laws do not otherwise control, the Plan and all
\ndeterminations made and actions taken pursuant to the Plan shall be governed by
\nthe laws of Minnesota and construed accordingly.<\/p>\n

Page 7 of 10<\/p>\n

\n

Exhibit I <\/strong><\/p>\n

Annual Incentive Plan Components: <\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Job Level<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Consolidated<\/strong>
\nEBITDA<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Division<\/strong>
\nEBITDA<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Consolidated
\nSales<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Division
\nSales<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Individual
\nObjectives<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

CEO and CFO\/COO<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

75<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

25<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Division Presidents<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

75<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

25<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Corporate VP153s<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

75<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

25<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Division VP153s<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

55<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

25<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

20<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Corporate Directors<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Division Directors<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

40<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Corporate Managers<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

Division Managers<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

40<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

30<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Page 8 of 10<\/p>\n

\n

Exhibit II <\/strong><\/p>\n

Annual Incentive Plan <\/em><\/strong><\/p>\n

FY11 Payout Schedule for Sales Objective
\n<\/em><\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

Percent of
\nTarget \/ Budget<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Payout %<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Target<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

100<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

100<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

99<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

90<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

98<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

80<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

97<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

70<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

96<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

60<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

95<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

50<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

94<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

93<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

30<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

92<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

20<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

91<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

10<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

90<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

5.0<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Minimum for Sales<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

90<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

5<\/strong><\/p>\n<\/td>\n

\n

% <\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

Below 90<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

0% Payout<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Threshold <\/u><\/strong><\/p>\n

Sales : 90% or higher <\/strong>of target must be achieved and is paid
\nout on a sliding scale<\/p>\n

Page 9 of 10<\/p>\n

\n

Exhibit III <\/strong><\/p>\n

Annual Incentive Plan <\/em><\/strong><\/p>\n

Payout Schedule for EBITDA Objective
\n<\/em><\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n\n

Percent of<\/em><\/strong>
\nTarget \/
\nBudget<\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

Payout<\/em><\/strong>
\n%<\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

Target<\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

100<\/em><\/strong><\/p>\n<\/td>\n

\n

% <\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

100<\/em><\/strong><\/p>\n<\/td>\n

\n

% <\/em><\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

99<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

97.5<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

98<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

95<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

97<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

90<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

96<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

85<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

95<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

80<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

94<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

75<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

93<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

70<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

92<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

65<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

91<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

60<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

90<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

55<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

89<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

50<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

88<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

45<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

87<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

40<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

86<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

35<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

85<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

30<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

84<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

25<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

83<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

20<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

82<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

15<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

81<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

10<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n<\/tr>\n

\n

Minimum for EBITDA<\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

80<\/em><\/strong><\/p>\n<\/td>\n

\n

% <\/em><\/strong><\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

5<\/em><\/strong><\/p>\n<\/td>\n

\n

% <\/em><\/strong><\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/td>\n<\/td>\n\n

Below 80<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

<\/td>\n<\/td>\n\n

0% Payout<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Threshold <\/u><\/strong><\/p>\n

EBITDA : 80% or higher <\/strong>of target must be achieved and is
\npaid out on a sliding scale<\/p>\n

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