Annual Incentive Plan, as amended
| Exhibit 10.1 |
| E-Z-EM, Inc. Annual Incentive Plan |
Plan Document for Participants Effective June 2001 |
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| AIP Plan Document Highlights E-Z-EM, Inc. (“EZEM” or “Company”) has created this Annual Incentive Plan (“AIP” or “Plan”) to reward you for your contributions to the success of the Company through individual and corporate performance. The AIP is an incentive form of compensation designed to better align your interests with those of the Company and its stockholders. The Company believes that growth and profitability will help contribute to increased shareholder value and the Plan provides you with an opportunity to receive a bonus award / annual incentive (“bonus”) on an annual basis depending upon the achievement of pre-determined corporate and individual performance criteria. As a participant in the AIP, you play an important role in helping to achieve EZEM’s goals and its future success. The AIP is designed to meet the following objectives: |
| • | Focus EZEM’s leaders on critical objectives – corporate, business area and individual results |
| • | Strengthen the link between pay and overall performance |
| • | Offer competitive, market-based annual incentive targets and opportunities |
| • | Encourage and reward behavior that reflects EZEM’s competencies (e.g., teamwork and collaboration, accountability for results) |
| • | Provide significant rewards for exceptional performance and no or little recognition for substantial underachievement |
| This AIP Plan Document provides you with detailed information about the Plan, including: |
| • | How the AIP works |
| • | How performance goals are established |
| • | How performance is measured |
| • | How bonuses are calculated |
For additional information on the AIP, refer to the Total Rewards / Incentive Plan section in your Employee Performance & Total Rewards Training and Resource Guide. |
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| AIP Plan Document Overview As a participant in the AIP, you are eligible to receive a bonus based on EZEM’s performance and your overall performance during each fiscal year. Your bonus opportunity is expressed as an annual incentive target and range, stated as a percentage of your actual base salary. As an overview, the AIP includes the following features: |
| • | Each AIP year begins on the first day of EZEM’s fiscal year. |
| • | The Plan consists of two performance components, corporate and individual, and are weighted differently depending upon your position in the Company. |
| • | At the beginning of each fiscal year, corporate financial performance objectives are established by the Company’s Board of Directors (“Board”) or the Compensation Committee of the Board (“Committee”). You and your manager will also establish a performance plan detailing your individual performance goals which include results-based objectives and competency objectives for the year. |
| • | At the end of the fiscal year, the Company’s performance is compared to the corporate goals and the percent of incentive target achieved is determined for the corporate component of your bonus opportunity. |
| • | Additionally, at the end of the fiscal year, your overall performance, including individual goals, are assessed and the percent of incentive target achieved is determined for the individual component of your bonus opportunity. |
| • | In general, AIP bonuses are earned based upon the performance evaluations made at the end of each fiscal year and your continuing satisfactory employment through the date of payment, which occurs in August following the completion of each fiscal year. |
| Bonus Opportunity At the beginning of each fiscal year, eligible participants are invited to participate for the new fiscal year and the incentive opportunity established for their incentive band. Bonus opportunities are stated as an annual incentive target, threshold, and range based on a percentage of your base salary. The incentive threshold indicates the percentage of your base salary that you are eligible to receive as an AIP bonus for the minimum level of acceptable performance. The threshold is the point below which no AIP bonus is earned for the performance component. |
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| AIP Plan Document The incentive range indicates the minimum and maximum AIP bonus percentages that you can receive, depending on the attained performance levels. At the beginning of each fiscal year, the Company will provide you with the minimum threshold level of achievement as well as the potential minimum and maximum payout level and corresponding payout curves. Under the AIP, the incentive ranges and assignment of EZEM’s job positions to the incentive bands are based on competitive market practices and the determination of management and the Committee. The actual value of your bonus will depend on actual performance levels achieved during the fiscal year, referred to as the “% of Incentive Target Achieved.” This percentage is calculated for both the corporate and individual performance components. More Details about Performance Criteria, Minimum and Maximum Payouts, Limitations and Payout Curves At the start of each fiscal year, the Company will provide you with the specific details about the AIP for the upcoming fiscal year, including the corporate (financial) performance objectives, a copy of your individual performance objectives (Performance Plan), the minimum threshold amounts, if any, minimum and maximum payouts and any limitations, and payout curves for each component. Components of Performance: Corporate Objectives & Individual Performance Your annual incentive opportunity is comprised of two components: |
| • | Corporate Performance |
| • | Individual Overall Performance |
| At the beginning of each fiscal year, corporate performance objectives are established by the Board or the Committee relative to key financial performance measures. These measures and corresponding objectives are used as the basis for measuring the Company’s degree of success at fiscal year-end. Although the measures may vary from year to year, generally the corporate objectives will include operating profit and net sales results as compared to budget or the results from the prior year, or both. |
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| AIP Plan Document For the individual component, your Performance Plan serves as the mechanism to capture key individual results-based objectives (RBOs), competency objectives (COs) and an assessment of overall performance. The individual goals are generally tailored to relate to matters within each person’s specific department or area of responsibility. The following chart summarizes the performance components under the AIP: |
Performance | Definition | Performance Measures | ||
| Corporate | EZEM | Financial Objectives – | ||
| May include operating profit | ||||
| and net sales | ||||
| Individual |  | Business area financial | Financial Objectives tailored | |
| RBOs (for applicable | for very specific goals such as | |||
| Leaders) | individual business unit net sales | |||
| or product line net sales | ||||
| Overall | Non-financial RBOs that | |||
| Performance | reflect overall Company | “SMART” RBOs | ||
| or specific business area | ||||
| objectives | Position description and | |||
| expectations | ||||
| Competencies | EZEM’s competencies and COs | |||
| At the end of each fiscal year, actual performance results are measured against the established performance corporate and individual objectives and expectations. The allocation of AIP bonuses is determined by: (1) the extent to which the corporate performance objectives are achieved and individual performance levels are attained, and (2) the weights assigned to the corporate and individual components. Entitlement to a bonus payment, however, is also dependent upon continuing satisfactory employment through payment date, which is usually in the month of August following the end of the fiscal year. The component weights vary by incentive band and are based on degree of control, organizational level, scope of responsibility and business area. |
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| AIP Plan Document Specifically: |
| Weight by Incentive Component | |||||
| Incentive Band | Corporate Performance | Individual Overall Performance | |||
| Senior Executive Band - | 75% | 25% | |||
| CEO & Sr. Vice President | |||||
| Executive Band - | 75% | 25% | |||
| Vice President | |||||
| Leadership I | 60% | 40% | |||
| Leadership II | 60% | 40% | |||
| Leadership III | 50% | 50% | |||
| Leadership IV | 25% | 75% | |||
Corporate Component – More Details A portion of your AIP bonus is based on EZEM’s performance. At the beginning of each fiscal year financial objectives are established and generally include, but are not limited to, operating profit and net sales targets. The Company will establish a range of acceptable financial performance results for each target (the “payout curve”). Each payout curve will include the target for the year and the minimum and maximum incentive levels for that particular component, as well as a threshold amount below which no AIP bonus will be paid. The percentage of weighting for specific financial objectives (e.g., operating profit and net sales) may vary by incentive bands and/or individual. Following the end of each fiscal year, the actual financial results for each target are compared to the appropriate payout curve to determine the amount of payment, if any, related to the corporate component of the AIP. Individual Performance Component – More Details A portion of your bonus is based on your individual performance objectives and your overall performance for each fiscal year. Your manager will document your performance at the end of each fiscal year based on their assessment of your |
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| AIP Plan Document specific performance compared to your individual objectives (RBOs). In considering your overall performance for the year, your manager will evaluate whether you have met all your RBOs, demonstrated corporate competencies in the achievement of results, provided strong contributions during the year, and accomplished your day-to-day responsibilities. Each year managers are provided with specific individual performance criteria as guidance in determining the individual component under the AIP. These recommendations are then reviewed by EZEM’s President and CEO and, for the Company’s Officers, by the Committee. AIP Bonus Restrictions The AIP has a “safety net” that prevents EZEM from paying out bonuses if specific performance levels are not achieved: Corporate Performance: The maximum global payout of all the incentive plans shall be equal to a percentage of the Company’s operating profit (operating profit defined as before the cost of the bonus program is deducted) as determined by the Committee. In the event the payout to all participants would exceed the annual percentage limitation of the Company’s operating profit, all bonus payments will be reduced pro-rata so as not to exceed the annual percentage limitation. Individual Performance: No bonuses are paid if an individual is placed on a Performance Enhancement Plan, regardless of corporate performance outcomes. In addition to the limitations set forth above, the Company may establish new entitlement limitations or restrictions, including modifying minimum thresholds for bonus payout or limiting maximum payout and may modify existing restrictions. Frequently Asked Questions: Who may participate in the Plan? EZEM Officers, Senior Directors, Directors, Senior Managers, Managers, and those with similar positions, as well as certain other key employees are eligible to participate in the AIP. When are new hires eligible to participate in the AIP? Most new hires are immediately eligible to participate, with bonuses prorated to reflect the period of employment during the fiscal year. However, new employees who start in the last quarter of the Company’s fiscal year will wait until the new fiscal year to participate. The Committee may, in its sole discretion, determine who shall be eligible to participate in the AIP and may establish such criteria as it deems fit for each fiscal year. |
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| AIP Plan Document When do I receive the corporate and individual performance criteria for a fiscal year? On or about the start of each fiscal year, you will be provided with the corporate (financial) objectives for such fiscal year. Additionally, you and your manager will prepare and complete your individual objectives on a Performance Plan. How do I know about my percentage targets, minimum and maximum payout, corresponding payout curves and any limitations? On or about the start of each fiscal year, you shall be provided with the percentage targets (minimum, target and maximum) and the payout curve for each performance component and any limitations. Do I receive my bonus if I leave EZEM? Generally, entitlement to your bonus requires both meeting the performance targets and satisfactorily continuing in EZEM’s employ through the time that bonuses are paid, usually in August immediately following the end of the fiscal year. Further explanation appears immediately below. Voluntary Separation : Employees who voluntarily leave EZEM before any bonuses are paid out have not earned a bonus and therefore will not be entitled to receive a bonus payment. Involuntary Separation without Cause: Employees with continuity of service greater than six months whose employment is terminated without cause will be entitled to a pro-rata portion of the bonus (depending upon date of termination) to which he or she would have been entitled, had the employee remained employed throughout the full fiscal year. Such a pro-rated bonus, if any, may be paid at such time as other employees receive their AIP bonuses. Length of Service: Employees who leave the Company with less than or equal to six months continuity of service at the time of payment shall not earn any bonus and therefore will not be entitled to receive a bonus payment. Involuntary Separation for Cause: Employees whose employment is terminated for cause will not earn any bonus and therefore will not be entitled to receive a bonus payment. For this purpose, ‘cause’ shall mean, and include without limitation: a separation from employment as the result of an Employee’s breach of trust, insubordination, failure to perform assigned duties or to follow any lawful instructions, dishonesty, fraud, breach of duty or loyalty, breach of any confidentiality or other agreement between the Company and the Employee, gross mismanagement, deliberate and premeditated acts against the interests of the Company, gross negligence, professional misconduct, willful misconduct, criminal activity, gross misconduct (as defined in the Company’s Employee Handbook and/or an employee’s employment contract), conduct involving moral turpitude or a material breach of a written Company or Subsidiary policy, including without limitation the Company’s Code of Business Conduct and Ethics in effect from time to time, or any other reason judged by the Company in good faith to be unacceptable behavior. |
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| AIP Plan Document When are AIP Bonuses Paid? Bonuses are generally paid during August of the following fiscal year. Is my base salary used to calculate my bonus? For bonus calculation purposes, your actual base earnings for the fiscal year are used, rather than your actual base salary on any given date. This approach takes into account different base salary levels that may apply during any given fiscal year and unpaid leaves of absence, during which a participant is not eligible for an incentive. Who do I call if I have questions about the AIP? If you have questions after you have read this Plan Document, you may contact your manager or the Vice President - Global Human Resources. Administration of the Plan The AIP shall be administered by the Committee, which shall have full power and discretionary authority to interpret the AIP, to construe any doubtful or disputed terms, to amend or modify the Plan as it deems appropriate, to determine the amount of benefits payable to an employee under the AIP, to prescribe, amend and rescind any rules, forms and procedures as it deems necessary or appropriate for the proper administration of the AIP, to make any other determinations, including factual determinations, and to take any other such actions as it deems necessary or advisable in carrying out its duties under the AIP. Miscellaneous This AIP Plan Document describes the provisions of the E-Z-EM, Inc. Annual Incentive Plan. EZEM reserves the full right to amend, suspend or terminate the AIP at any time, for any reason or no reason. Enrollment in this AIP is not a guarantee of employment and employment with EZEM is not a guarantee of continued participation in this AIP. Enrollment in the AIP is not a guarantee that a bonus will be paid. Actual bonuses, if any, will be determined based on the performance of EZEM and individual employees. |
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