Fiscal Year 2001 Incentive Compensation Program Outline for Company Employees

Summary

This agreement outlines the company's incentive compensation program for fiscal year 2001. Eligible employees, selected by the CEO and COO, can earn up to 15% of their base salary as a bonus if the company meets or exceeds budgeted revenue and operating income targets. Bonuses are subject to review and approval by the Compensation Committee for executive officers. Payments are based on audited financial results and will be made before the end of the first quarter of fiscal 2002.

EX-10.12 3 0003.txt INCENTIVE COMPENSATION PROGRAM Exhibit 10.12 ------------- INCENTIVE COMPENSATION PROGRAM OUTLINE AND MEASUREMENT FISCAL YEAR 2001 INCENTIVE COMPENSATION INCREMENTS: Up to 15% of base salary can be earned by each participant upon successfully achieving budgeted revenue and operating income levels for the year, based on applicable budgets, as follows: A. 10% upon achieving the budgeted revenue and operating income for the fiscal year 2001, and B. 5% upon exceeding budgeted revenue and operating income by 10%. PARTICIPATION: Participants will be identified by the Company's CEO and COO and advised of their eligibility to participate at the beginning of the fiscal year. Any bonuses earned by executive officers of the Company must be reviewed and approved by the Compensation Committee of the Board of Directors prior to payment. MEASUREMENT AND PAYMENT: Measurement will be based on the actual revenues and results of operations for the Company for the fiscal year ended May 31, 2001, after completion of the annual financial audit. As noted, actual operating income, as defined below, will be compared to budgeted operating income. Earned bonuses will be paid prior to the end of the first quarter of fiscal 2002 (August 31, 2001). DEFINITION OF OPERATING INCOME: "Operating Income" is defined as net revenue less cost of goods sold and sales, general and administrative expenses, including allocation of corporate costs, accounting department costs, human resource department costs, and information technology department costs to each division/company/unit. Operating income will be an identifiable line item on each division, group and consolidated budget.