School Specialty Management Incentive Plan (MIP) Recommendation to Board of Directors

Contract Categories: Human Resources › Bonus & Incentive Agreements
Summary

This agreement outlines a cash incentive plan for senior leaders at School Specialty, aiming to align them with the CEO's priorities of stabilizing the business, improving infrastructure, and enhancing financial performance. The plan bases payouts on the company's Operating EBITDA for fiscal year 2014, with specific thresholds for achievement and corresponding payout percentages. Only director-level employees and above are eligible, and participants must be employed at the time of payment. The Board of Directors will approve the final payout, which is capped at 150% of the target amount.

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EX-10.1 2 exh101.htm MANAGEMENT INCENTIVE PLAN

Exhibit 10.1

Management Incentive Plan (MIP) Recommendation to Board of Directors                                                                       September 16, 2013


Purpose:

Provide a cash incentive program for the leadership of School Specialty

 

 

Goal:

Gain 100% alignment and engagement from senior leaders around the CEO priorities:  1) stabilize our business; 2) align
our infrastructure better and lower our costs; 3) improve our bottom line performance.

 

 

Structure:

Essentially, this is the Incentive Bonus Plan structure (as of June 1, 2007) that has been in place previously

 

 

Cost:

At current staffing level of eligible participants (64 total), annual cost at Target  = $1,963,000

 

 

Payout:

Payout Percentage will be determined by the FY2014 final results with payout occurring within 90 days from the close
of the fiscal year

 

 

Target/Metric:

The MIP for F2014 will be based on a single metric of Operating EBITDA with the following thresholds and Scale:


 

 

Threshold

Target

Maximum

 

% achievement

90.5%

100%

114.3%

 

EBITDA

$38.0M

$42.0M

$48.0M

 

% Payout(1)

80%

100%

150%


(1) This represents the percentage of an individual target based on the salary grade level of the participant


Other Specifics:

Additional Comments on the plan include:


 

√

Participant must be employed with company on date of payment.

 

√

Board of Directors will approve final payout percentage

 

√

Target represents Adjusted Budget ($44M original budget less $2M for public company costs)

 

√

Participants are director level and up (range on target as % of base = 15% to 60%)

 

√

No payout for EBITDA achievement below $38M; program capped at 150% achievement