Discount Auto Parts, Inc. Fiscal 2001 Bonus Plan for Peter J. Fontaine and William C. Perkins

Summary

Discount Auto Parts, Inc. established a 2001 bonus plan for executives Peter J. Fontaine and William C. Perkins. The plan provides quarterly bonuses based on company income before taxes, with the bonus split equally between earnings growth and comparable store sales growth. Bonuses increase or decrease depending on performance against set goals for sales and earnings. The plan can be changed or terminated at any time by the Compensation and Benefits Committee or the Board of Directors.

EX-10.6 2 ex10-6.txt INCENTIVE COMPENSATION PLAN'S 1 EXHIBIT 10.6 DISCOUNT AUTO PARTS BONUS PLAN: FISCAL 2001 BONUS PLAN FOR: PETER J. FONTAINE Sales and earnings growth are keys to the long-term success of Discount Auto Parts and they incorporate all of the other aspects of our business. Therefore this bonus plan has been designed to incorporate the results of these two areas. Amounts to be paid pursuant to the terms of this plan will be in addition to base pay amounts. The following bonus will be paid quarterly following the formula set forth below: Your quarterly Base Bonus amount will be calculated as follows: Income Before Income Taxes multiplied by 1.0% = Base Bonus. This Base Bonus will then be divided into two equal parts providing an Earnings Growth bonus and a Comparable Store Sales bonus. Our goal for Comparable Store Sales increase is 10%. Our goal for Earnings Growth increase is 25%. For every 1% above the Comparable Store Sales goal of 10% add 5% to the Comparable Store Sales bonus component. For every 1% above the Earnings Growth (as calculated based on Income from Operations) goal of 25% add 5% to the Earnings Growth bonus component. For every 1% below the Comparable Store Sales goal of 10% deduct 5% from the Comparable Store Sales bonus component. For every 1% below the Earnings Growth (as calculated based on Income from Operations) goal of 25% deduct 5% from the Earnings Growth bonus component. Bonus calculations will be made on a quarterly basis by comparing the then current quarterly results to the same quarter prior year results. Adjustments will be made for non-comparable weeks. Any resulting bonuses will be paid on a quarterly basis as well. EXAMPLE CALCULATION: Income Before Taxes $11,500,000 Times applicable multiplier .01 ----------- Base Bonus $ 115,000 =========== Based on the $115,000 Base Bonus, $57,500 will be dedicated to Earnings Growth and $57,500 to Comparable Store Sales Growth. Based on an example assumption of 12% Comparable Store Sales and 28% Earnings Growth for the quarter, the following bonuses would result: 2 Comparable Store Sales Bonus Amount - ----------------------------------- $57,500 x 120% = $69,000 Earnings Growth Bonus Amount - ---------------------------- $57,500 x 130% = $74,750 The resulting total Bonus earned for quarter would be $143,750. The "Income before Taxes" and "Income from Operations" amounts to be used in calculating the Base Bonus will include a reasonable estimate of the executive bonuses to be paid for the quarter. The Comparable Store Sales and Earnings Growth bonus calculations will be made independent of each other (e.g. a negative Earnings Growth bonus calculation will not offset a positive Comparable Store Sales bonus calculation). This plan may be terminated by the Compensation and Benefits Committee or the Board of Directors at any time and may be subject to periodic adjustments to earnings and/or comparable sales for one-time items or other matters as deemed appropriate by executive management. 3 DISCOUNT AUTO PARTS, INC. BONUS PLAN: FISCAL 2001 BONUS PLAN FOR: WILLIAM C. PERKINS Sales and earnings growth are keys to the long-term success of Discount Auto Parts and they incorporate all of the other aspects of our business. Therefore this bonus plan has been designed to incorporate the results of these two areas. Amounts to be paid pursuant to the terms of this plan will be in addition to base pay amounts. The following bonus will be paid quarterly following the formula set forth below: Your quarterly Base Bonus amount will be calculated as follows: Income Before Income Taxes multiplied by 1.0% = Base Bonus. This Base Bonus will then be divided into two equal parts providing an Earnings Growth bonus and a Comparable Store Sales bonus. Our goal for Comparable Store Sales increase is 10%. Our goal for Earnings Growth increase is 25%. For every 1% above the Comparable Store Sales goal of 10% add 5% to the Comparable Store Sales bonus component. For every 1% above the Earnings Growth (as calculated based on Income from Operations) goal of 25% add 5% to the Earnings Growth bonus component. For every 1% below the Comparable Store Sales goal of 10% deduct 5% from the Comparable Store Sales bonus component. For every 1% below the Earnings Growth (as calculated based on Income from Operations) goal of 25% deduct 5% from the Earnings Growth bonus component. Bonus calculations will be made on a quarterly basis by comparing the then current quarterly results to the same quarter prior year results. Adjustments will be made for non-comparable weeks. Any resulting bonuses will be paid on a quarterly basis as well. EXAMPLE CALCULATION: Income Before Taxes $11,500,000 Times applicable multiplier .01 ----------- Base Bonus $ 115,000 =========== Based on the $115,000 Base Bonus, $57,500 will be dedicated to Earnings Growth and $57,500 to Comparable Store Sales Growth. Based on an example assumption of 12% Comparable Store Sales and 28% Earnings Growth for the quarter, the following bonuses would result: 4 Comparable Store Sales Bonus Amount - ----------------------------------- $57,500 x 120% = $69,000 Earnings Growth Bonus Amount - ---------------------------- $57,500 x 130% = $74,750 The resulting total Bonus earned for quarter would be $143,750. The "Income before Taxes" and "Income from Operations" amounts to be used in calculating the Base Bonus will include a reasonable estimate of the executive bonuses to be paid for the quarter. The Comparable Store Sales and Earnings Growth bonus calculations will be made independent of each other (e.g. a negative Earnings Growth bonus calculation will not offset a positive Comparable Store Sales bonus calculation). This plan may be terminated by the Compensation and Benefits Committee or the Board of Directors at any time and may be subject to periodic adjustments to earnings and/or comparable sales for one-time items or other matters as deemed appropriate by executive management.