LESCO BONUS PLAN

EX-10.B 3 l12538aexv10wb.htm EXHIBIT 10(B) LESCO BONUS PLAN FOR 2005 Exhibit 10(B)

EXHIBIT 10(b)

LESCO BONUS PLAN


POLICY:	The purpose of the LESCO Bonus Plan is to promote the strategic interests of LESCO by providing key executives with financial incentive awards for performance that contributes significantly to the success of the company, as determined by meeting or exceeding specific strategic goals.


RESPONSIBLE OFFICER:	President and Chief Executive Officer

PROCEDURE:

I.	ELIGIBILITY AND PARTICIPATION

	A.	Eligibility to participate in the Plan shall be limited to key executives and other associates as recommended by the Vice President Human Resources with final approval by the President and Chief Executive Officer.

	B.	Following the start of the calendar year, the list of participants for a Plan year can be revised upon authorization of the President and Chief Executive Officer. Any associate that is hired or selected to participate after the start of the calendar year shall participate on a pro-rata basis. This is determined by multiplying the maximum bonus opportunity by a fraction, the numerator of which shall be the number of days of his/her participation in the calendar year and the denominator of which shall be 365.

	C.	Suggested Participation Levels


Management Level		Target Bonus as % of Base
CEO		60%
CFO		60%
Senior VP / VP		20% — 40%
Sr. Director / Director		15% — 25%
Sr. Manager / Manager		10% — 20%

Note: The Board of Directors and the President and Chief Executive Officer must approve associate’s participation levels.

Participation in the Plan as recommended and approved is not guaranteed from one year to the next.

II.	PAYMENT OF BONUS AWARD EARNED

Bonuses are earned after the last day of the calendar year. Associates must be actively employed at the time of payment to receive prior year’s bonus.

	B.	Termination due to retirement or death will result in a pro-rata incentive award upon approval of the President and Chief Executive Officer.

	C.	With respect to Section 1, paragraph B. above, the whole amount of the bonus earned in the calendar year shall be paid to each eligible associate after the company’s audited financial results are available, but no later than March 15^th of the following year.

	D.	An associate will not receive a bonus when, in the judgement of the Company:

	1.	The associate’s overall performance for the period is consistently below expectations.

	2.	The associate has failed to achieve agreed upon goals.

	3.	The associate has violated corporate policies or has broken any Federal, State, or Local Laws.

	4.	Management determines at its discretion, that an award should not be given.

	E.	Following release of the Company’s audited financial statements, the Board of Directors and the President and Chief Executive Officer can increase, decrease or eliminate awards when it is determined that the amount of the awards is unreasonable in view of any unique circumstances or the Company’s financial performance.

	F.	All payouts for eligible participants shall be at the discretion of the President and Chief Executive Officer.

III.

PLAN YEAR

The Plan Year is defined as January 1^st through December 31^st,or the fiscal year when not a calendar year.

IV.	OPERATING RULES

	A.	Each participant will have a Target Bonus that will be the amount earned for meeting the Plan’s performance measurements. The Target Bonus will be expressed as a percentage of actual base salary and will be reviewed by the Vice President Human Resources and approved by the President and Chief Executive Officer.

	B.	Bonus payouts will be calculated based on the attainment of corporate goals of Basic Earnings Per Share (BEPS), Return of Investment Capital (ROIC), Sales Growth, and an Individual Performance Goal. Weighting for each goal against total target bonus percent is outlined in the Bonus Participation Letter.

Attainment of the financial Plan measurements are paid out between threshold and maximum as defined in the Payout Matrix below.

Bonus Plan Payout Matrix


			% of
	% of		Target
	Target		Dollars
	Achieved		Payable		Definitions
Threshold		90%		80%	Threshold performance pays at 80% of Target Dollars prorated up to Target.
		91%		82%
		95%		90%
Target		100%		100%	Target pays at 100% of Target Dollars.
		10%5		110%
		110%		120%
		115%		130%
		120%		140%
		125%		150%
		130%		160%
		135%		170%
		140%		180%
		145%		190%
Maximum		150%		200%	Above Target pays at a 2:1 ratio up to maximum of 200% of Target Dollars.

Attainment of the Individual Performance Achievement measurement is paid based on your agreed upon goals and performance rating as defined in the Performance Matrix below.

Bonus Plan Individual Performance Matrix


Agreed Upon Goals /				% of Target Paid for Personal
Performance Rating				Performance Component
	Doesn’t Meet	(1	)	0% — 20%
	Meets	(2	)	70% — 100%
	Exceeds	(3	)	100% — 120%

Personalized Bonus Plan documents will be presented to all participants that detail their approved target percent, target dollars and performance measures or individual targets for the current Plan year.

V.	GUIDELINES

Bonus Plan participants’ base salary in effectJanuary 1 of the Plan year will be the basis for calculating target and actual bonus dollars.

	B.	An associate who is hired or promoted after January 1^st and qualifies for participation during the Plan year will receive a payment for earned rewards (see section 1, paragraph B) based on prorated salary data in effect with regard to either date of hire or promotion.

	C.	Only full-time, regular associates are eligible to participate in the Bonus Plan. When an associate is on a Leave of Absence for any portion of the calendar year, the associate will participate in the Plan on a pro-rata basis as long as the associate is on active status for a minimum of ninety (90) days during the calendar year.

	D.	Attainments of goals are based on actual results.

	E.	All percentages will be rounded to the nearest hundredth of a percent.

	F.	Bonus awards are included as compensation for the LESCO, Inc. Stock Investment and Salary Savings and Trust (401(k) Plan) and the LESCO, Inc. 401(k) Restoration Plan, but are excluded in calculating all other associate benefits.

VI.	RIGHT OF PARTICIPANTS AND FORFEITURE

Nothing in this Plan shall:

	1.	Confer upon any associate any right with respect to continuation of employment with LESCO.

	2.	Interfere in any way with the right of the Company to terminate his or her employment at any time, or

	3.	Confer upon any associate or any person any claim or right to any distribution under the Plan except in accordance with its terms.

No right or interest of any Participant in the Plan shall, prior to actual payment or distribution of such Participant, be assignable or transferable in whole or part, either voluntarily or by operation of law otherwise, or be subject to payment of debts of any Participant by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner.

VII.	PLAN ADMINISTRATION

	A.	The Plan shall be administered by LESCO. LESCO can at any time amend, suspend, terminate or reinstate any or all of the provisions of the Plan as may seem necessary or advisable for the administration of the Plan.

	B.	LESCO interprets this policy for plan administration.

	C.	Any major business and/or organizational transactions that occur during the course of the Plan year subject the Plan to appropriate changes. When this occurs, the Plan will be amended accordingly and submitted to the Board of Directors for approval consistent with the business/organizational transaction.

Participants will be provided written communication of Plan changes within 30 days of the effective date of change.

The President and Chief Executive Officer must approve any exceptions to the policy.


Approved:	/s/ Michael P. DiMino	Date:	February 25, 2005

	Michael P. DiMino, President & CEO