SUMMARY OF MANAGEMENT BONUS PLAN

EX-10.8 7 d315040dex108.htm SUMMARY OF MANAGEMENT BONUS PLAN Summary of management bonus plan

Exhibit 10.8

SUMMARY OF MANAGEMENT BONUS PLAN

The Stereotaxis Management Bonus Plan is designed to bring annual focus to the financial and operating metrics that contribute to sustainable growth in shareholder value. The bonus plan performance measures for any particular year represent key drivers of our business such as orders, revenue, gross margins, utilization, operating expenses, operating profitability, and specific strategic initiatives.

Each year the Compensation Committee of the Board of Directors will determine the objectives and corresponding weighting for the bonus plan based on the priorities of the business for the upcoming performance year. Three levels of performance are established for each objective. The annual business plan, which includes growth rates or other success metrics for each objective, establishes the target level of performance; threshold performance is defined as 90% of the business plan for each objective; and the maximum level of performance is 120% of the business plan.

The 2012 Management Bonus Plan has been modified to include two semi-annual performance periods with one-half of the targeted bonus opportunity established for each period.

 

   

LEVEL

 

  

PERFORMANCE

 

Threshold

   90% Business Plan
   

Target

   100 % of Business Plan
   

Maximum

   120 % of Business Plan

Participants in the Stereotaxis Management Bonus Plan, based on their ability to impact results, will be assigned to one of five target incentive award levels ranging from 15% to 50% of base salary. Each level is assigned an overachievement performance factor ranging from 10% to 100% of the target incentive award. In 2012 the overachievement performance factor was modified to provide 100% of each participant’s target incentive award and will be determined based on annual results.


       

LEVEL

 

  

GROUP

 

  

TARGET %

BASE

 

  

OVER

ACHIEVEMENT

 

V

   Executive Staff    50 %    +100% Target
   

IV

   Balance Exec Staff    40 %    +50% Target
   

III

   Vice Presidents    30 %    +25% Target
   

II

   Directors    20 %    +25% Target
   

I

  

Senior Key

Contributors

   15%    +10% Target

An incentive payout level is associated with each level of performance against each objective. Performance at threshold results in payout of 50% of target award; performance at target will result in a payout of 100% of target award; and performance at maximum results in a payout at the corresponding overachievement level of the participant (100% for each participant in 2012).

 

   

PERFORMANCE

 

  

% TARGET AWARD

 

Threshold

   50%
   

Target

   100 %
   

Maximum

  

200 % (Level V)

150% (Level IV)

125% (Level II – III)

110% (Level I)

Award Pool Determination

The payout result of each objective will be independently calculated incorporating the actual performance against the objective, the weighting of each objective, and the overachievement factor, if performance against the objective is above plan. The total of each calculation determines the Company’s overall level of performance against its objectives. This total percent, multiplied by the total sum of the target awards for each participant, determines the total award pool. The Compensation Committee approves the award pool and all awards to Section 16 Officers.


Award Pool Distribution

The distribution of the award pool will be allocated by the President & CEO to each function based on their level of contribution toward the achievement of annual objectives. In turn, each functional leader will determine each participant’s award, as follows:

 

   

25% will automatically be awarded to each individual as a participant in the plan.

 

   

The remaining 75% will be adjusted by the functional leader based on performance of each participant against their personal goals.