Cascade Corporation Executive Incentive Plan
Exhibit 10.1
Cascade Corporation
Executive Incentive Plan
Fiscal Year 2010
Overview
The key plan objective for fiscal 2010 is to protect shareholder value. We believe the measure with the greatest impact on protecting shareholder value is free cash flow (FCF). As a result, this plan focuses on free cash flow as the primary milestone metric. Adjusted income before taxes (AIBT) is included as a second milestone metric.
Key Plan Features
| • | Initial threshold requires participants to meet “double milestones” of adjusted income before tax (AIBT) and free cash flow (FCF). |
| • | Incentive payments are based on actual free cash flow achieved during the year. |
| • | Minimum and Target FCF milestone are 15% and 25% higher, respectively, than company’s historic FCF high. |
| • | Board has discretion to adjust if economic/business conditions warrant. |
Plan Metrics and Guidelines
FCF and AIBT or executive incentive calculations will be determined as follows:
| • | Free Cash Flow (FCF) |
| o | Basis for calculation will be cash flow from operations (per audited financial statements) minus maintenance capital expenditures. |
| o | Cash expenses (tax adjusted) related to the European restructuring plan will be added back. |
| • | Adjusted Income Before Tax (AIBT) |
| o | Calculation of threshold AIBT will be based on consolidated income before taxes (per audited financial statements) (IBT). |
| o | Executive incentive expenses and stock-based compensation expense included in IBT will be added back. |
| o | Significant non-recurring income and/or expenses may be included or excluded at the Compensation Committee’s discretion. |
| o | AIBT will be adjusted to eliminate costs directly related to the European Restructuring Plan. |
Award Opportunity
A minimum of $22.0 million AIBT and $46.0 million FCF must be achieved for executives to receive any cash incentive. From $46.0 million to $50.0 million of FCF each executive will receive a prorata percentage of their salary in incentive as set forth in the Executive Incentive Payout Schedule – Fiscal Year 2010 table below. From $50.0 million to $54.0 million of FCF each executive will receive an increased prorata percentage of their salary in incentive. Above $54.0 million FCF each executive will receive a predetermined percentage of the total FCF as set forth in the Fiscal 2010 Incentive Schedule up to established maximums.
Executive Incentive Payout Schedule - Fiscal Year 2010
| Milestones | Minimum | Target | Superior | ||||||
| Adjusted Income Before Taxes (AIBT) | $ | 22,000,000 | |||||||
| Free Cash Flow (FCF) | $ | 46,000,000 | $ | 50,000,000 | $ | 54,000,000 | |||
| Payout as % of Salary | |||||||||
| Minimum | Target | Superior | |||||||
| President and Chief Executive Officer | 20% | 35% | 65% | ||||||
| Senior Vice President and Chief Operating Officer | 17% | 29% | 55% | ||||||
| Chief Financial Officer | 14% | 23% | 44% | ||||||
| Vice President Human Resources | 14% | 23% | 44% | ||||||
| Vice President Corporate Manufacturing | 14% | 23% | 44% | ||||||
| Vice President Engineering & Marketing | 14% | 23% | 44% | ||||||
| Vice President North America | 14% | 23% | 44% | ||||||
| Vice President Europe | 14% | 23% | 44% | ||||||
| Vice President Asia Pacific | 14% | 23% | 44% | ||||||
