CompUSA 2010 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2010 CompUSA annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

29
The Compensation Committee determines the persons who will receive Awards, the type of Awards
granted, and the number of shares subject to each Award. The Compensation Committee also determines the prices,
expiration dates, vesting schedules, forfeiture provisions and other material features of Awards. The Compensation
Committee has the authority to interpret and construe any provision of the Plan and to adopt such rules and
regulations for administering the Plan as it deems necessary or appropriate. All decisions and determinations of the
Compensation Committee are final, binding and conclusive on all parties.
The 2010 Long Term Incentive Plan provides that granting or vesting of restricted stock, restricted stock
units and performance awards may be conditioned on the achievement of specified performance goals. These goals
must be established by the Compensation Committee within 90 days of the beginning of the year (or other period to
which the performance goals relate) or, if shorter, within the first 25% of the performance period.
The performance goals may be based on one or more of: share price, revenues, earnings (including but not
limited to EBITDA), earnings per share, return on equity, expenses, and objective strategic and governance business
goals. Each such performance goal may (1) be expressed with respect to the Company as a whole or with respect to
one or more divisions or business units, (2) be expressed on a pre-tax or after-tax basis, (3) be expressed on an
absolute and/or relative basis, (4) employ comparisons with past performance of the Company (including one or
more divisions) and/or (5) employ comparisons with the current or past performance of other companies, and in the
case of earnings-based measures, may employ comparisons to capital, stockholders’ equity and shares outstanding.
To the extent applicable, the measures used in performance goals set under the 2010 Long Term Incentive
Plan are determined in a manner consistent with the methods used in the Company’ s Forms 10-K and 10-Q, except
that adjustments will be made for certain items, including special, unusual or non-recurring items, acquisitions and
dispositions and changes in accounting principles.
2010 NEO Cash Bonus Plan
In March 2010, pursuant to the 2010 Long Term Incentive, our Compensation Committee, with input from
our Chief Executive Officer, established our 2010 NEO Cash Bonus Plan (“2010 Bonus Plan”) providing for target
cash bonuses for the NEO’ s based on the achievement of certain financial and non-financial performance-based
criteria in 2010. The 2010 Bonus Plan implemented for 2010 the 2010 Long Term Incentive Plan and pertains
specifically to the payment of non-equity incentive compensation to NEO’ s for 2010.
For 2010, such financial and non-financial goals, the percentage of the executive’ s entire cash bonus tied to
such goals and the weighting of each component under such goal, were as follows:
• Financial Goals (80% of total cash bonus target)
– Adjusted Operating Income Growth (50%); the Compensation Committee believes this is the most
important individual component and aligns the interests of our executives with those of our
stockholders, in addition to building long term value. Adjusted Operating Income is defined as
operating income adjusted for unusual or nonrecurring items as determined by our Compensation
Committee.
– Sales Growth (20%); the Compensation Committee believes topline sales growth is key to our
Company remaining competitive with larger companies.
Sales are defined as sales revenue net of
returns on a constant currency basis.
– Return on Invested Capital Growth (10%); the Compensation Committee believes this will
encourage management to pursue operational efficiencies in establishing strategic goals and
planning for growth.
Return on Invested Capital is defined as adjusted operating income divided
by the sum of (i) the book value of stockholders’ equity plus the book value of interest-
bearing
obligations minus total cash and cash equivalents.
• Non-Financial Goals for 2010 (20% of total cash bonus target)