World Fuel Services 2007 Annual Report Download - page 85

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64435 TX 77WORLD FUEL SERVICES
ANNUAL REPORT
28-Feb-2008 10:13 EST
CLN PSTAM
RR Donnelley ProFile SER raynj0da 7*
PMT 2C
TX8724AC351002
9.9.26
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
As of December 31, 2007 and 2006, deferred compensation and accrued interest totaling $0.2 million was
included in deferred compensation and other long-term liabilities in the accompanying consolidated balance
sheets.
Pursuant to their employment agreements, our CEO and COO are entitled to receive a cash severance
payment if: (a) we terminate the executive for any reason other than death, disability or cause; (b) the executive
resigns for good reason (generally a reduction in his responsibilities or compensation, or a breach by us), or
resigns for any reason following a change of control; or (c) we elect not to renew the executive’s employment
agreement upon expiration, for any reason other than cause. The severance payment is equal to two times the
executive’s average salary and bonus during the three-year period preceding termination; provided, if (i) the
termination occurs within three years after a change of control the multiple set forth above will be three instead
of two, and (ii) in the case of a non-renewal, as described in item (c) above, the multiple will be one and the
severance will be paid in 26 equal installments over a one year period. Upon any such termination, we will
continue to provide coverage to the executive under our group insurance plans for a period of one, two or three
years depending on the reason for termination, and all of the executive’s stock options, SSARs and stock grants
will immediately vest.
We have also entered into employment agreements or separation agreements with certain of our other
executive officers and key employees. These agreements provide for minimum salary levels, and, in most cases,
bonuses which are payable if specified performance goals are attained. Some executive officers and key
employees are also entitled to severance benefits upon termination or non-renewal of their contracts under certain
circumstances.
As of December 31, 2007, the approximate future minimum commitments under employment agreements,
excluding discretionary and performance bonuses, are as follows (in thousands):
Year Ended December 31,
2008 .............................................................. $3,326
2009 .............................................................. 510
2010 .............................................................. 353
$4,189
Executive Incentive Plan
Our five most senior executives are eligible to receive annual bonuses under our 2003 Executive Incentive
Plan (“Executive Incentive Plan”) upon achievement of annual performance targets. The five senior executives
participating in the Executive Incentive Plan are: 1) CEO, 2) COO, 3) Chief Financial Officer (“CFO”), 4) Chief
Risk and Administrative Officer (“CRAO”) and 5) Aviation Segment President (“Aviation President”). The
bonus performance targets are generally based on net income and/or earnings per share growth. For 2007, our
five most senior executives did not meet the minimum performance targets for annual bonuses. However, for our
CFO, he will receive a guaranteed minimum annual bonus for 2007 of $0.1 million based on his employment
offer letter. For 2006 and 2005, based on the achievement of the maximum performance targets, our CEO, COO,
CRAO and Aviation President earned their respective maximum annual bonus amount. In addition to the above
four senior executives, our former CFO also participated in the Executive Incentive Plan in 2005 and earned his
maximum annual bonus amount based on the achievement of the maximum performance targets. Total annual
bonuses earned by the above executives as a group was $0.1 million, $4.0 million and $3.4 million for 2007,
2006 and 2005, respectively. At December 31, 2007 and 2006, in the aggregate, the amount of bonus accrued
under the Executive Incentive Plan was $0.1 million and $4.0 million, respectively, which was included in
accrued expenses and other current liabilities in the accompanying consolidated balance sheets.
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