Cadmus FY 2003 Executive Incentive Plan Description

Summary

This agreement outlines the Cadmus FY 2003 Executive Incentive Plan for key managers at the corporate and group levels. The plan rewards participants based on achievement of financial and non-financial objectives, with awards ranging from 10% to 60% of base salary depending on performance. Eligibility is limited to certain salary grades, and participants must be employed at the time of award distribution. Awards are subject to approval by senior management and the Board's compensation committee, and may be adjusted at their discretion. The plan covers the fiscal year from July 1, 2002 to June 30, 2003.

EX-10.1 3 g85028exv10w1.txt EX-10.1 CADMUS FY 2003 EXECUTIVE INCENTIVE PLAN EXHIBIT 10.1 FY 2003 INCENTIVE PLAN DESCRIPTION PURPOSE The Incentive Plan is designed to motivate and reward participants for the achievement of fiscal year financial and non-financial objectives that directly contribute to the success of the various business groups and Cadmus overall. ELIGIBILITY Participation in the Plan is limited to key managers at the Corporate and Group levels who have accountability for and significant impact on business strategy, business growth and profitability. Participants must be in salary grade 17 and above and their participation is confirmed at the beginning of each Plan year. Participants must still be employed at the time of distribution generally late August following completion of the fiscal year. A minimum of six months service in an eligible position generally is required for participation in the Plan. Awards to individuals with less than one year's participation will be prorated based on the tenure in the eligible position. TARGET INCENTIVE AWARD The Target Incentive Award is the amount that the participant is eligible to receive if the combined, weighted performance against the Plan objectives equals an overall achievement level of 100%. Depending upon the scope and impact of the participant's position, Target Incentive Awards range from 10% to 60% of base salary. In addition, participants are evaluated based on personal objectives which are set at the beginning of the year. For all group participants, one common individual goal will be the achievement of the group's overall sales budget for FY2003. The level of achievement for the individual objectives also impacts the award. The actual award received by the participant could be substantially higher or lower than the target amount. Corporate participants are evaluated based on Earnings Per Share (EPS) and business group participants on Operating Profit (OP) for their group with an added "Cadmus Factor" based on EPS. FIRST HALF AWARDS No midyear payments will be made for FY 2003. GENERAL PLAN PROVISIONS Participation in the Plan terminates on the date the participant terminates employment with Cadmus, whether voluntary or involuntary. With the exception of disability, retirement or death, participants must be actively employed on the date the awards are paid in order to receive an incentive award. Cadmus, at its sole discretion, may make an award to a former associate, or to the former associate's estate, in such amount as it deems appropriate. Should a participant transfer to another business group during the Plan year, the final award will be jointly determined and prorated for the time spent in each group. Incentive award recommendations for all Plan participants are to be submitted to the Senior Vice President, Human Resources and Corporate Secretary by August 15, 2003. Award payments require approval by the CEO, Group President and the Executive Compensation and Organization Committee (ECOC) of the Board of Directors. Documentation of individual objectives and accomplishments may be required to be submitted along with the award recommendations at year-end. The CEO and ECOC reserve the right to adjust the overall incentive pool, and in turn, individual incentive awards in an amount deemed necessary to meet minimally acceptable EPS requirements. The CEO and ECOC also reserve the right to make discretionary awards, as may be deemed appropriate, for performance that falls below the Plan threshold or above the Plan maximum. Payments will be made to participants in cash as soon as practical after the Executive Compensation and Organization Committee meeting in August 2003. Nothing in this FY 2003 Incentive Plan Description or in any action taken thereunder shall affect the Company's right to terminate at any time and for any reason the employment of any associate who is a participant in the Plan. DEFINITIONS BASE SALARY The base annual salary rate of a participant as of October 1 of the Plan Year or, if later, the time he or she is approved as a participant for a given year, exclusive of bonuses, commissions or any special payments EARNINGS PER SHARE (EPS) Net earnings, post incentive, but before unusual, one-time charges, gains or losses divided by average common shares outstanding. EPS does include ongoing savings from restructuring. OPERATING PROFIT(OP) Pre-incentive, operating earnings before one-time charges, gains or losses. Includes ongoing savings from restructuring. PLAN YEAR The period commencing July 1, 2002 and ending June 30, 2003 for which performance is being measured.