Magellan Health Services 2003 Management and Special Associate Bonus Plan
Magellan Health Services established this 2003 bonus plan to reward full-time management and associate employees for meeting specific performance goals. Eligibility depends on hire date, job grade, and not participating in other incentive programs. Bonuses are funded based on the company achieving or exceeding its EBITDA target, with awards varying by organizational level and individual performance. Supervisors recommend bonuses, which require documentation and approval by the CEO or Compensation Committee. Employees must remain employed through the payout date to receive a bonus, and all payments are at the company's discretion.
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Exhibit 10.14
MAGELLAN HEALTH SERVICES
Management Bonus Plan
Special Associate Bonus Plan
2003
Purpose
The purpose of Magellan Health Services' Management Bonus Plan is to reward management employees for achieving specific performance objectives contributing to the overall results of the Company. Magellan also may offer an associate bonus plan, structured to meet specific business needs. Business units with function specific plans, such as sales, and recovery functions, are covered under separate plans.
Eligible Participants—Management Bonus Plan
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- Must be full time employees not participating in any other incentive program.
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- Must be meeting or exceeding performance standards.
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- Must not have submitted resignation of employment.
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- Must have been hired prior to December 31, 2002 to be eligible to receive 100% of bonus award.
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- Must have been hired between January 1 through March 31, 2003 to be eligible to receive 75% of bonus award.
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- Must have been hired between April 1 through June 30, 2003 to be eligible to receive 50% of the bonus award.
Eligibility Participants—Special Associate Bonus Plan
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- Must be full time employees not participating in any other incentive program
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- Must have been hired prior to June 30, 2003 to be eligible to receive 100% of the bonus award.
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- Must be meeting or exceeding performance standards.
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- Must not have submitted resignation of employment.
Plan Funding
The plan is funded based on the company meeting or exceeding its EBITDA* targets.
| EBITDA Target | Funding Percentage | |||
|---|---|---|---|---|
| $ | 133.8 Million | 100 | % | |
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- EBITDA is the Company's consolidated net revenues, less salaries, cost of care and other operating expenses (excluding amounts accrued for payments under this plan) plus equity in earnings (or minus equity in losses) of unconsolidated subsidiaries, as reported by the Company.
Additional Funding Considerations
If the EBITDA target is not met, the funding pool for incentives will be reduced dollar for dollar until the target can be met, or the funding pool is exhausted, whichever comes first. Any funds remaining after the target is met may be used for discretionary incentive payouts, as approved by the Compensation Committee.
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If the EBITDA target is exceeded, the Compensation Committee will have the discretion to increase the incentive funding pool.
Note: This grid assumes a 75% participation level based on forced ranking.
Payout Formula
Salary times target % equals 100% of the bonus award. Supervisors may recommend a lower or higher bonus award based on individual performance and achievement of goals.
Grades 37 and Above Target Bonus Percentage Levels
| Level in Organization | Target Bonus % of Base Salary | |
|---|---|---|
| Chairman | 60% | |
| Chief Officers | 35 to 50% | |
| SVPs & Grades 45 and 46 | 25 to 35% | |
| Grades 42 to 44 | 20 to 30% | |
| Grades 39 to 41 | 15% | |
| Assoc MD, Medical Directors, and Vice President of Medical Services | 10% | |
| Grades 37 and 38 | 8% |
Grades 36 and Below Target Bonus Dollar Amounts
| Level in Organization | Target Bonus Dollar Amount | ||
|---|---|---|---|
| Grades 34 to 36 | $ | 2,200 | |
| Grades 31 to 33 | $ | 1,100 | |
| Non-Exempt | $ | 550 | |
Determination of Incentive Award
In order to receive an incentive bonus, individuals must be recommended by their immediate supervisor, based on the achievement of their performance goals. The exact amount of bonus will be determined by the extent to which they met and exceeded their goals. All recommendations for incentive awards will be substantiated by appropriate documentation of performance goals and assessment.
Condition of Payout
No bonus will be paid to any employee if employment is terminated, whether voluntary or involuntary, prior to the actual payment date. No bonus will be paid to any employee who has submitted his/her resignation.
Payout Approval
The Compensation Committee of the Board must separately approve any payout for officers of the Company for whom the Compensation Committee must approve salary and/or benefits under the Compensation Committee approval policy. The CEO will approve all other payouts. Actual payments under the Plan are at the sole discretion of the CEO (subject to Compensation Committee approval as set forth above) depending on the financial condition and future prospects of the Company at the time payment is due.
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