FY 2009 Chase Corporation Long Term Incentive Plan
Exhibit 10.2
CHASE CORPORATION
Long Term Incentive Plan
Award Design and Grant Process
As of September 1, 2008
Key Provisions
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Long term incentive: performance shares (Restricted Stock)
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Performance measure / target: Earnings Before Tax (EBT): average of the actual results from the most recent three years and the current year budget, each year weighted equally
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Performance measurement period: September 1st of the fiscal year through August 31st of the same fiscal year (twelve month period)
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Vesting: 2 years after the end of the performance measurement period (total of three years)
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Grant date: first day of measurement period
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Stock price for award: closing price on the last trading day prior to the grant date (generally August 31st, or the last business day in the fiscal year ending prior to the performance measurement period)
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Threshold: the point at which an award is earned (50% of target). Between threshold and target the award increases on a pro-rata basis.
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Stretch area: performance in excess of target awarded at a higher rate (150% for 120% achievement)
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Beyond Stretch: Award increases pro-rata, with no cap, at an incremental rate of one for one beyond the Stretch award if actual results are greater than 150% of target.
·
Termination provisions
Termination Event | Vesting | Payment in Shares |
Retirement | Pro-rated | Paid as scheduled |
Voluntary | All shares forfeit | No payment |
Without cause | Pro-rated | Paid as scheduled |
With cause | All shares forfeit | No payment |
Upon change of control | Acceleration at target | Paid at change of control |
Death or disability | Pro-rated | Paid as scheduled |
Example:
o
Grant 1,000 performance shares
o
Stock price (August 31st) is $17.27
o
Threshold is 50% of target
o
Stretch area pays out pro-rata at rate of 150% for 120% achievement
o
Beyond Stretch area pays out pro-rata at an incremental rate of one for one (no cap)
Performance | EBT | Payout % of Target | Vesting Shares |
Threshold | 50% of Target | 50% | 500 |
Target | 100% of Target | 100% | 1000 |
Stretch at 120% | 120% of Target | 150% | 1500 |
Beyond Stretch | 130% of Target | 160% | 1600 |
| 140% of Target | 170% | 1700 |
| 150% of Target | 180% | 1800 |
·
Eligibility: Recommended award levels @ Target
Participant | Target Award |
Chairman & CEO | 100% of Base salary |
President & COO | 80% of Base Salary |
CFO & Treasurer | 60% of Base Salary |
VP Engineering | 60% of Base Salary |
Compensation expense related to the target awards plus the projected increase or decrease based on the performance measurement is recognized on a ratable basis over the three year vesting period.
Award opportunities are set annually and this Plan is subject to the approval of the Compensation and Management Development (C&MD) Committee and may be modified from time to time.
See annual exhibit for the performance target and the approved targeted award issuance
Fiscal Year Schedule
o Quarter prior to the performance measurement period (Q4) | o Board approves continuance of the Plan and sets grant date |
o First quarter of the performance measurement period (Q1) | o Goals and awards proposed by management for current year o C&MD Committee approves target and award for current year plan |
o First quarter after the performance measurement period (Q1) | o C&MD Committee reviews and approves final increases or decreases of target award o Additional restricted shares are issued if actual results exceed the target or clawed back if the actual results fall short of the target |
