EX-10.8: MANAGEMENT INCENTIVE COMPENSATION PLAN

Contract Categories: Human Resources - Bonus & Incentive Agreements
EX-10.8 7 z50542a2ex10-8.htm EX-10.8: MANAGEMENT INCENTIVE COMPENSATION PLAN EX-10.8: MANAGEMENT INCENTIVE COMPENSATION PLAN
 

Exhibit 10.8

THE

WCI COMMUNITIES, INC.
(WCI)

MANAGEMENT INCENTIVE
COMPENSATION PLAN
(MICP)

 

 

January 1, 2002

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 2

I.   OBJECTIVE
 
    The WCI Communities, Inc., (“WCI” or “Company”) Management Incentive Compensation Plan (the “MICP” or “Plan”) was established to reward the performance of those key employees whose efforts significantly impact WCI’s achievement of its annual financial goals. The Plan will place emphasis on differentiating performance among our diverse businesses while maintaining a consistent reward theory and a common focus on achieving our financial and non-financial objectives. This Plan is also designed to provide significant financial rewards to participants when such objectives are met or exceeded, (a “Bonus”). However, through a “pay-for-performance” structure, the Plan will generate reduced or no incentive payment when objectives or financial goals are not met.
 
II.   PARTICIPATION
 
    A Plan participant must be a) an officer of WCI or b) an employee whose position has been identified as having significant value towards WCI achieving its financial goals (a “Participant”).
 
    Newly hired employees will not be eligible for participation in the Plan until they have completed at least eighteen (18) months of employment. Employees with less than eighteen (18) months of service may become a Participant provided they meet all of the following criteria:

  (i)   They meet either a) or b) above, and
 
  (ii)   Have been employed for at least six (6) months prior to payment, and
 
  (iii)   Their participation in the Plan had been approved in advance by the Chief Executive Officer of the Company. Such approval would generally be received at the time of negotiating employment terms with the employee.

III.   VESTING
 
    Termination of employment prior to a payment date will result in the loss of the entire Bonus award. Discretionary bonuses and pro-rated bonuses may be given with the approval of the Chief Executive Officer.
 
IV.   BONUS AMOUNTS AS A PERCENT OF SALARY
 
    A Participant’s potential maximum Bonus amount, (as a percent of base salary), will be established within the following ranges:

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 3

     
    % of Salary
   
President/Chief Operating Officer   Up to 200%
Senior Vice Presidents/Division Presidents   40% – 100%
Vice Presidents/Directors/Controllers   20% – 30%
Other Key Managers   10% – 20%

V.   PARTICIPANT CLASSIFICATION
 
    Based on a Participant’s position within WCI, each Participant will be classified as a member of one of the following groups:

  (i)   Home Building Personnel
 
  (ii)   Division Operating Personnel
 
  (iii)   Corporate Administrative Personnel

VI.   OBJECTIVES
 
    The amount of each Participant’s Bonus shall be determined based on a combination of, (i) the Participants Bonus amount as percent of base salary, (ii) the group within which the Participant is classified and, (iii) achievement of one or more of the following objectives: Corporate Financial Objectives and Division/Project Objectives.
 
    The matrix of a Participant’s classification and objectives upon which a Bonus shall be determined is as follows:

For 2002, the MICP allocations are the following:

                 
            Division/Project
    Corporate Financial   Objectives and/or
Classification   Objectives   Personal Objectives
 
 
Home Building Personnel
     20 %     80 %
Division Operating Personnel
     20 %     80 %
Corporate Administrative Personnel
     100 %     0 %

VII.   ACHIEVEMENT MEASUREMENT

  A.   Corporate Administrative Personnel

    Each Corporate Administrative Personnel Participant shall be eligible to receive incentive compensation, paid on their individual Bonus target amount as a percent of base salary in the event the Corporate Financial Objective has been achieved.
 
    The Corporate Financial Objective is a combination of two (2) measurements of the financial performance of WCI.

  (i)   Net Income

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 4

  (ii)   Return on Invested Capital-(“ROC”) earnings before interest and taxes (“EBIT”) divided by the weighted average capital deployed for the period. Total capital includes the sum of debt-—excluding non-monetary liabilities such as payables and accruals, plus equity, less unrestricted cash.

    Note: Excluded from the Bonus calculation will be any parcel land sales (in overall dollars) that are not in the 2002 WCI Business Plan (“Business Plan”) for that year, unless such incremental parcel sales are submitted to and approved by the Board of Directors prior to such incremental sales.
 
    This provision is intended to give management the business flexibility to “substitute” parcels, but require Board approval for “incremental” parcels. If Parcel A is in the Business Plan with a contribution of $1,000 and Parcel A is sold for a higher contribution, then the higher contribution will be included in income for “Bonus Calculation”; similarly, if the contribution is less than the Business Plan it will negatively effect income for Bonus Calculation. Management has the authority to “substitute” parcels in the Business Plan to respond to market demand.
 
    WCI must meet at least eighty (80%) of the Net Income and Return on Capital, weighted as listed below, for each of the Corporate Financial Objectives to be satisfied.
                   
100% of Net Income
             75 %
(15% of the Net Income component is measured quarterly, 15% is measured quarterly YTD and 70% is measured annually)
                
Achievement of Quarterly Net Income Goals
                
 
Achievement of 1st Quarter
     3.75 %        
 
Achievement of 2nd Quarter
     3.75 %        
 
Achievement of 3rd Quarter
     3.75 %        
 
Achievement of 4th Quarter
     3.75 %        
 
    
         
 
     15 %        
Achievement of Cumulative YTD Net Income Goals
                
 
Achievement at 1st Quarter
     3.75 %        
 
Achievement at 2nd Quarter
     3.75 %        
 
Achievement at 3rd Quarter
     3.75 %        
 
Achievement at 4th Quarter
     3.75 %        
 
    
         
 
     15 %        
Achievement of Annual Net Income Goal
     70 %        
100% of Annual Return on Capital
             25 %
 
            
 
 
             100 %

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 5

    Since Net Income is the most important and most comprehensive measure of current year performance, it will be the primary measurement and will be weighted at 75% of the potential MICP award. Return on Capital will be used as a secondary measurement that will motivate deployment of resources judiciously. Specifically, the program will work as follows:

Net Income—75% of MICP Potential (All acceleration of payouts will
be based upon Net Income performance)

     
Actual Achieved   Actual Payout (% Earned)
 
120% or higher of $112.1M   160% 
101 to 119%   100% plus 3% for each $1.12M above $112.1M
$112.1M   100% 
80 to 99% of $112.1M   100% less 3% for each $1.12M Below $112.1M
Less than 80% of $112.1M   No payout

Return on Capital (R.O.C.) – 25% of total MICP potential

     
Actual R.O.C.   Actual Payout (% earned)
 
18% or higher   100%; multiplied by the payout percentage awarded on Net income performance only if ROC is 100% or higher
15.4% to 17.95%   40% plus 3% for each .15%
Achieved in excess of 15.4%
Less than 15.4%   No payout

    Any Corporate Administrative Personnel Bonus shall be payable to a qualifying Participant in the first quarter of the following Plan year.
 
    (See Exhibit A & AA for hypothetical example)

  B.   Home Building Personnel
 
      Each Home Building Personnel Participant shall be eligible to receive incentive compensation, paid on their individual bonus target amount as a percent of base salary in the event targeted Division/Project

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 6

      Objectives and Corporate Financial Objectives have been achieved.
 
      Bonus Compensation payable to eligible Home Building Personnel shall be calculated on an allocation weighted eighty (80%) percent on Division/Project Objectives and twenty (20%) percent on Corporate Financial Objectives.
 
  (i)   Corporate Financial Objectives (20% of Total Target)
 The Company Financial Objective portion of the above calculation, twenty (20%) percent of the total, is a combination of two (2) measurements of the financial performance of WCI, Net Income and Return on Capital. A detailed explanation of the Corporate Financial Objective is outlined in Section VII (A) above.
 
  (ii)   Division/Project Objectives (80% of Total Target)
 The Division/Project Objective portion of the above calculation, eighty (80%) percent of the total, is based on the eligible participant meeting predetermined financial objectives by job positions as listed below.
         
        Financial
Title   Community/Division   Objectives
 
 
Division President/Financial
Manager		   Division   Net Home Building
$ Contribution after Sales Overhead
Project Manager   Community   Net Home Building
$ Contribution after Sales Overhead
Land Manager/Purchasing
Manager		   Division   Gross Margin $
Production Manager   Community   Net Home Building
$ Contribution before Sales Overhead

      The bonus payment calculation will be structured as follows:
                   
100% of Net Contribution
             80 %
Achievement of Quarterly Net Income Goals
                
 
Achievement of 1st Quarter
     3.75 %        
 
Achievement of 2nd Quarter
     3.75 %        
 
Achievement of 3rd Quarter
     3.75 %        
 
Achievement of 4th Quarter
     3.75 %        
 
    
         
 
     15 %        
Achievement of Cumulative YTD Net Income Goals
                
 
Achievement at 1st Quarter
     3.75 %        
 
Achievement at 2nd Quarter
     3.75 %        
 
Achievement at 3rd Quarter
     3.75 %        
 
Achievement at 4th Quarter
     3.75 %        
 
    
         
 
     15 %        
Achievement of Annual Net Income Goal
     70 %        
100% Corporate Financial Objectives
             20 %
 
            
 
 
             100 %

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 7

  (iii)   In the event the Division/Project Objectives are not achieved or are exceeded, the bonus payment will be paid according to the following schedule:
     
Actual Achieved   Actual Payout
Against Plan   (% earned)
 
120% or higher   160% 
101% to 119%   100% plus 3% for each 1% over 100% to 119%
100%   100% 
80% to 99%   100% less 3% for each 1%
under 100%
Less than 80%   No Payout

  (iv)   The Corporate Financial Objectives payment will only be paid if eighty (80%) percent or more of the Division/Project Objective is met.

(See Exhibit B & BB for hypothetical example)
 
  (v)   The Corporate Financial and Division/Project Objective Payments shall be paid to qualifying Participants in the first quarter of the following Plan year.
 
  C.   Division Operating Personnel
 
      Each Division Operating Personnel Participant shall be eligible to receive incentive compensation, paid on their individual Bonus target amount as a percent of base salary in the event targeted Division/Project Financial Objectives and Corporate Financial Objectives have been achieved.
 
      Bonus compensation payable to eligible Division Operating Personnel shall be calculated on an allocation based on two (2) components weighted eighty percent (80%) on Division/Project Objectives and twenty percent (20%) on Corporate Financial Objectives.
 
  (i)   Corporate Financial Objectives (20% of Total Target)
 The Company Financial Objective portion of the above calculation, twenty (20%) percent of the total, is a combination of two (2) measurements of the financial performance of WCI, Net Income and

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 8

      Return on Capital. A detailed explanation of the Corporate Financial Objective is outlined in Section VII (A) above.
 
  (ii)   Division/Project Objectives (80% of Total Target)
 The eighty percent (80%) component is comprised of two (2) separate factors. The weighting of these factors, which in the aggregate represent a total of eighty percent (80%) of the total target, shall be calculated as follows:
                   
100% of Net Contribution
             80 %
Achievement of Quarterly Net Income Goals
                
 
Achievement of 1st Quarter
     3.75 %        
 
Achievement of 2nd Quarter
     3.75 %        
 
Achievement of 3rd Quarter
     3.75 %        
 
Achievement of 4th Quarter
     3.75 %        
 
    
         
 
     15 %        
Achievement of Cumulative YTD Net Income Goals
                
 
Achievement at 1st Quarter
     3.75 %        
 
Achievement at 2nd Quarter
     3.75 %        
 
Achievement at 3rd Quarter
     3.75 %        
 
Achievement at 4th Quarter
     3.75 %        
 
    
         
 
     15 %        
Achievement of Annual Net Income Goal
     70 %        
100% Corporate Financial Objectives
             20 %
 
            
 
 
             100 %

  (iii)   In the event the Division/Project Objectives are not achieved or exceeded, the bonus payment will be paid according to the following schedule:
     
Actual Achieved   Actual Payout
Against Plan   (% earned)
 
120% or higher   160% 
101% to 119%   100% plus 3% for each 1% over 100% to 119%
100%   100% 
80% to 99%   100% less 3% for each 1%
under 100%
Less than 80%   No Payout

  (iv)   The Corporate Financial Objectives payment will only be paid if eighty (80%) percent or more of the Division/Project Objective is met.
 
      (See Exhibit D & DD for hypothetical example)

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 9

  (v)   The Corporate Financial and Division/Project Objective Payments shall be paid to qualifying Participants in the first quarter of the following Plan year.

VIII.   FORM
 
    Attached Exhibit “A”-2002 Individual and Department Incentive Bonus Plan. The form is to be used to structure Participant participation.
 
IX.   IMPACT ON BENEFITS
 
    A Participant’s Bonus, within legal limitations, will be used for contribution to the WCI Communities 401(k) and Retirement Plan unless participant elects not to make such a contribution and notifies the payroll department in writing of this election. This contribution will also receive the applicable Company match.
 
X.   APPROVALS
 
    At the beginning of each year, the Chief Executive Officer or President/Chief Operating Officer shall submit to the Compensation Committee of the Board of Directors for it approval, the proposed incentive program for that year.

NOTE: This document is to inform the employees of potential compensation based on their performance and performance of the Company. All terms and conditions of this Plan may be modified by WCI from time-to-time upon notice. This document is for information purposes only and in no way should be construed as an employment contract or other commitment to continue your employment.

EXHIBIT A

Corporate Administrative Participant

         
Base Salary:
   $ 75,000  
Target Bonus %:
     25 %
Target Bonus Amount:
   $ 18,750  

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 10

                             
                Hypothetical Result        
               
       
Net Income (@ 75%)
   $ 14,062                  
Achievement of 1st Quarter
   $ 527     Achieved   $ 527  
Achievement of 2nd Quarter
   $ 527     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 527     Achieved   $ 527  
Achievement of 4th Quarter
   $ 527     Not Achieved   No Payment
Achieve Cumulative
   $ 527     Achieved 110% YTD   $ 527  
 
1st Quarter YTD Net Income
           Achieved 110% YTD 1st Qtr)        
Achieve Cumulative
   $ 527     Achieved 102% YTD   $ 527  
 
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
Achieve Cumulative
   $ 527     Achieved 100% YTD   $ 527  
 
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
Achieve Cumulative
   $ 527     Achieved 104% YTD   $ 527  
 
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
Achievement of Annual
           Achieved @ 104%        
   
Net Income
   $ 9,846     Of Plan   $ 9,846  
Return on Capital (@ 25%)
   $ 4,688     Achieved @ 100%        
 
           Of Plan   $ 4,688  
 
                    
 
 
           Total   $ 17,696  

Since Net Income was 104% of the Plan and the Return on Capital achieved was 100% or better, the $17,696 bonus achieved would be increased by 112% (3% for each 1% Net Income over 100%) for a total bonus payment of $19,820.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 11

EXHIBIT AA

Corporate Administrative Participant
(In the event 100% of Return on Capital is not met)

         
Base Salary:
   $ 75,000  
Target Bonus %:
     25 %
Target Bonus Amount:
   $ 18,750  
                             
                Hypothetical Result        
               
       
Net Income (@ 75%)
   $ 14,062                  
 
Achievement of 1st Quarter
   $ 527     Achieved   $ 527  
 
Achievement of 2nd Quarter
   $ 527     Not Achieved   No Payment
 
Achievement of 3rd Quarter
   $ 527     Achieved   $ 527  
 
Achievement of 4th Quarter
   $ 527     Not Achieved   No Payment
 
Achieve Cumulative
   $ 527     Achieved 110% YTD   $ 527  
   
1st Quarter YTD Net Income
           (Achieved 110% YTD 1st Qtr)        
 
Achieve Cumulative
   $ 527     Achieved 102% YTD   $ 527  
   
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
 
Achieve Cumulative
   $ 527     Achieved 100% YTD   $ 527  
   
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
 
Achieve Cumulative
   $ 527     Achieved 104% YTD   $ 527  
   
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
 
Achievement of Annual
           Achieved @ 104%        
   
Net Profit
   $ 9,846     Of Plan   $ 9,846  
 
                    
 
 
                   Total   $ 13,008  
Return on Capital
   $ 4,688     Achieved @ 68%        
 
           Of Plan   $ 3,188  

Since Net Income was 104% of the Plan, the Net Income bonus achieved of $13,008 would be increased by 112% (3% for each 1% over 100%) or $14,569 and added to $3,188 (ROC @ 16.8% – 15.4% = 1.4% ÷ .15% = 9.3% x 3% + 40% = 68%) for a total bonus payment of $17,757.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 12

EXHIBIT B

Homebuilding

         
Base Salary:
   $ 100,000  
Target Bonus %:
     40 %
Target Bonus Amount:
   $ 40,000  
                 
Division/Project Financial Objectives
   $ 32,000       (80 %)
Company Financial Objectives
   $ 8,000       (20 %)
 
    
     
 
   $ 40,000       (100 %)

Corporate Financial Objectives
(@ 20% of Targeted Bonus, or $8,000)

                           
Net Income   Targeted   Hypothetical   Bonus
(@ 75% or $6,000)   Bonus   Result   Paid
 
 
 
Achievement of 1st Quarter
   $ 225     Achieved   $ 225  
Achievement of 2nd Quarter
   $ 225     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 225     Achieved   $ 225  
Achievement of 4th Quarter
   $ 225     Not Achieved   No Payment
Achieve Cumulative
   $ 225     Achieved 110% YTD   $ 225  
 
1st Quarter YTD Net Income
           (Achieved 110% YTD 1st Qtr)        
Achieve Cumulative
   $ 225     Achieved 102% YTD   $ 225  
 
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
Achieve Cumulative
   $ 225     Achieved 100% YTD   $ 225  
 
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
Achieve Cumulative
   $ 225     Achieved 104% YTD   $ 225  
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
Achievement of Annual
           Achieved @ 104%        
 
Net Profit
   $ 4,200     Of Plan   $ 4,200  
Return on Capital
           Achieved @ 100%        
(@ 25% or $2,000)
   $ 2,000     Of Plan   $ 2,000  
 
                    
 
 
           Total   $ 7,550  

Since the Net Income was 104% of Plan and the Return on Capital achieved was 100% or better, the $7,550 bonus achieved would be increased by 112% (3% for each 1% Net Income over 100%) for a total bonus payment of $8,456.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 13

Division / Project Objectives
(@ 80% of Targeted Bonus, or $32,000)

                           
Net Contribution   Targeted   Hypothetical   Bonus
      Bonus   Result   Paid
 
 
 
Achievement of 1st Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 2nd Quarter
   $ 1,200     Not Achieved   No Payout
Achievement of 3rd Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 4th Quarter
   $ 1,200     Not Achieved   No Payout
Achievement of 1st Quarter
   $ 1,200     Achieved 110% YTD   $ 1,200  
  Cumulative YTD (Financial Objective)
           (Achieved 110% YTD 1st Qtr)        
Achievement of 2nd Quarter
   $ 1,200     Achieved 102% YTD   $ 1,200  
  Cumulative YTD (Financial Objective)
           (Achieved 94% 2nd Qtr)        
Achievement of 3rd Quarter
   $ 1,200     Achieved 100% YTD   $ 1,200  
  Cumulative YTD (Financial Objective)
           (Achieved 96% 3rd Qtr)        
Achievement of 4th Quarter
   $ 1,200     Achieved 104% YTD   $ 1,200  
  Cumulative YTD (Financial Objective)
           (Achieved 112% 4th Qtr)        
Achievement of Annual
           Achieved at 104%        
 
Net Contribution
   $ 22,400     Of Plan   $ 22,400  
 
                    
 
 
           Total   $ 29,600  

Since the Division / Project Objective was 104% of Plan, the $29,600 would be increased by 112% (3% for each 1% over 100%) for a total payment of $33,152.

The total bonus paid to this participant would be $50,909.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 14

EXHIBIT BB

Homebuilding
(In the event 100% of Return on Capital is not met)

         
Base Salary:
   $ 100,000  
Target Bonus %:
     40 %
Target Bonus Amount:
   $ 40,000  
                 
Division/Project Financial Objectives
   $ 32,000       (80 %)
Company Financial Objectives
   $ 8,000       (20 %)
 
    
     
 
   $ 40,000       (100 %)

Corporate Financial Objectives
(@ 20% of Targeted Bonus, or $8,000)

                         
Net Income   Targeted   Hypothetical   Bonus
(@ 75% or $6,000)   Bonus   Result   Paid
 
 
 
Achievement of 1st Quarter
   $ 225     Achieved   $ 225  
Achievement of 2nd Quarter
   $ 225     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 225     Achieved   $ 225  
Achievement of 4th Quarter
   $ 225     Not Achieved   No Payment
Achieve Cumulative
   $ 225     Achieved 110% YTD   $ 225  
1st Quarter YTD Net Income
           (Achieved 110% YTD 1st Qtr)        
Achieve Cumulative
   $ 225     Achieved 102% YTD   $ 225  
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
Achieve Cumulative
   $ 225     Achieved 100% YTD   $ 225  
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
Achieve Cumulative
   $ 225     Achieved 104% YTD   $ 225  
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
Achievement of Annual
           Achieved @ 104%        
Net Profit
   $ 4,200     Of Plan   $ 4,200  
 
                    
 
 
           Total   $ 5,550  
Return on Capital
           Achieved @ 68%        
(@ 25% or $2,000)
   $ 2,000     Of Plan   $ 1,360  

Since the Net Income was 104% of the Plan, the Net Income bonus achieved of $5,550 will be increased by 112% (3% for each 1% over 100%) or $6,216, and added to $1,360 (ROC @ 16.8% — 15.42% =1.4% ÷ .15% =9.3% x 3% +40% = 68%) for a Corporate financial bonus of $7,576.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 15

Division / Project Objectives
(@ 80% of Targeted Bonus, or $32,000)

                         
Net Contribution   Targeted   Hypothetical   Bonus
    Bonus   Result   Paid
 
 
 
Achievement of 1st Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 2nd Quarter
   $ 1,200     Not Achieved   No Payout
Achievement of 3rd Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 4th Quarter
   $ 1,200     Not Achieved   No Payout
Achievement of 1st Quarter
   $ 1,200     Achieved 110% YTD   $ 1,200  
Cumulative YTD (Financial Objective)
           (Achieved 110% YTD 1st Qtr)        
Achievement of 2nd Quarter
   $ 1,200     Achieved 102% YTD   $ 1,200  
Cumulative YTD (Financial Objective)
           (Achieved 94% 2nd Qtr)        
Achievement of 3rd Quarter
   $ 1,200     Achieved 100% YTD   $ 1,200  
Cumulative YTD (Financial Objective)
           (Achieved 96% 3rd Qtr)        
Achievement of 4th Quarter
   $ 1,200     Achieved 104% YTD   $ 1,200  
Cumulative YTD (Financial Objective)
           (Achieved 112% 4th Qtr)        
Achievement of Annual
           Achieved at 104%        
Net Contribution
   $ 22,400     Of Plan   $ 22,400  
 
                    
 
 
                Total   $ 29,600  

Since the Division / Project Objective was 104% of Plan, the $29,600 would be increased by 112% (3% for each 1% over 100%) for a total payment of $33,152.

The total bonus paid to this participant would be $40,728

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 16

EXHIBIT C

Homebuilding
(Division Presidents and Division Project Managers)

         
Base Salary:
   $ 100,000  
Target Bonus %:
     40 %
Target Bonus Amount:
   $ 40,000  
                 
Division/Project Financial Objectives
   $ 32,000       (80 %)
Company Financial Objectives
   $ 8,000       (20 %)
 
    
     
 
   $ 40,000       (100 %)

Corporate Financial Objectives
(@ 20% of Targeted Bonus, or $8,000)

                         
Net Income   Targeted   Hypothetical   Bonus
(@ 75% or $6,000)   Bonus   Result   Paid
 
 
 
Achievement of 1st Quarter
   $ 225     Achieved   $ 225  
Achievement of 2nd Quarter
   $ 225     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 225     Achieved   $ 225  
Achievement of 4th Quarter
   $ 225     Not Achieved   No Payment
Achieve Cumulative
   $ 225     Achieved 110% YTD   $ 225  
1st Quarter YTD Net Income
           (Achieved 110% YTD 1st Qtr)        
Achieve Cumulative
   $ 225     Achieved 102% YTD   $ 225  
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
Achieve Cumulative
   $ 225     Achieved 100% YTD   $ 225  
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
Achieve Cumulative
   $ 225     Achieved 104% YTD   $ 225  
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
Achievement of Annual
           Achieved @ 104%        
Net Profit
   $ 4,200     Of Plan   $ 4,200  
Return on Capital
           Achieved @ 100%        
(@ 25% or $2,000)
   $ 2,000     Of Plan   $ 2,000  
 
                    
 
 
           Total   $ 7,550  

Since the Net Income was 104% of Plan and the Return on Capital achieved was 100% or better, the $7,550 bonus achieved would be increased by 112% (3% for each 1% Net Income over 100%) for a total bonus payment of $8,456.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 17

 

 

Division / Project Objectives
(@ 80% of Targeted Bonus, or $32,000)

                         
    Targeted   Hypothetical   Bonus
    Bonus   Result   Paid
   
 
 
 
                        
Monthly Achievement Bonus
   $ 12,000     Achieved nine   $ 9,000  
 
           Months        
                           
Net Contribution   Targeted   Hypothetical   Bonus
    Bonus   Result   Paid
     
 
 
 
                        
Achievement of 1st Quarter
   $ 750     Achieved   $ 750  
Achievement of 2nd Quarter
   $ 750     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 750     Achieved   $ 750  
Achievement of 4th Quarter
   $ 750     Not Achieved   No Payment
 
                        
Achievement of 1st Quarter
   $ 750     Achieved 110% YTD   $ 750  
 
Cumulative YTD
           (Achieved 110% YTD 1st Qtr)        
Achievement of 2nd Quarter
   $ 750     Achieved 102% YTD   $ 750  
 
Cumulative YTD
           (Achieved 94% 2nd Qtr)        
Achievement of 3rd Quarter
   $ 750     Achieved 100% YTD   $ 750  
 
Cumulative YTD
           (Achieved 96% 3rd Qtr)        
Achievement of 4th Quarter
   $ 750     Achieved 104% YTD   $ 750  
 
Cumulative YTD
           (Achieved 112% 4th Qtr)        
 
                        
Achievement of Annual
           Achieved at 104%        
 
Net Contribution
   $ 14,000     Of Plan   $ 14,000  
 
                    
 
 
           Total   $ 18,500  

Since the Division / Project Objective was 104% of Plan, the $18,500 would be increased by 112% (3% for each 1% over 100%) for a total payment of $20,720.

The total bonus paid to this participant would be $38,176.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 18

EXHIBIT CC

Homebuilding
(Division Presidents and Division Project Managers)
(In the event 100% of Return on Capital is not met)

                         
Base Salary:
   $ 100,000  
Target Bonus %:
     40%  
Target Bonus Amount:
   $ 40,000  
                         
Division/Project Financial Objectives
   $ 32,000 (80 %)
Company Financial Objectives
   $ 8,000 (20 %)
 
    
 
 
   $ 40,000 (100 %)

Corporate Financial Objectives
(@ 20% of Targeted Bonus, or $8,000)

                           
Net Income   Targeted   Hypothetical   Bonus
(@ 75% or $6,000)   Bonus   Result   Paid
 
 
 
 
                        
Achievement of 1st Quarter
   $ 225     Achieved   $ 225  
Achievement of 2nd Quarter
   $ 225     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 225     Achieved   $ 225  
Achievement of 4th Quarter
   $ 225     Not Achieved   No Payment
 
                        
Achieve Cumulative
   $ 225     Achieved 110% YTD   $ 225  
 
1st Quarter YTD Net Income
           (Achieved 110% YTD 1st Qtr)        
Achieve Cumulative
   $ 225     Achieved 102% YTD   $ 225  
 
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
Achieve Cumulative
   $ 225     Achieved 100% YTD   $ 225  
 
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
Achieve Cumulative
   $ 225     Achieved 104% YTD   $ 225  
 
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
 
                        
Achievement of Annual Net Profit
   $ 4,200     Achieved @ 104%   $ 4,200  
 
           Of Plan        
 
                        
 
                    
 
 
                        
 
           Total   $ 5,550  
 
                        
Return on Capital
   $ 2,000     Achieved @ 68%   $ 1,360  
(@ 25% or $2,000)
           Of Plan        

Since the Net Income was 104% of the Plan, the Net Income bonus achieved of $5,100 will be increased by 112% (3% for each 1% over 100%) or $5,712, and added to $1,360 (ROC @ 16.8% — 15.4% =1.4% ÷ .15% =9.3% x 3% +40% = 68%) for a Corporate financial bonus of $7,022.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 19

 

 

Division / Project Objectives
(@ 80% of Targeted Bonus, or $32,000)

                         
    Targeted   Hypothetical   Bonus
    Bonus   Result   Paid
   
 
 
 
                        
Monthly Achievement Bonus
   $ 12,000     Achieved nine   $ 9,000  
 
           Months        
                           
      Targeted   Hypothetical   Bonus
Net Contribution   Bonus   Result   Paid
 
 
 
 
                        
Achievement of 1st Quarter
   $ 750     Achieved   $ 750  
Achievement of 2nd Quarter
   $ 750     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 750     Achieved   $ 750  
Achievement of 4th Quarter
   $ 750     Not Achieved   No Payment
 
                        
Achievement of 1st Quarter
   $ 750     Achieved 110% YTD   $ 750  
 
Cumulative YTD
           (Achieved 110% YTD 1st Qtr)        
Achievement of 2nd Quarter
   $ 750     Achieved 102% YTD   $ 750  
 
Cumulative YTD
           (Achieved 94% 2nd Qtr)        
Achievement of 3rd Quarter
   $ 750     Achieved 100% YTD   $ 750  
 
Cumulative YTD
           (Achieved 96% 3rd Qtr)        
Achievement of 4th Quarter
   $ 750     Achieved 104% YTD   $ 750  
 
Cumulative YTD
           (Achieved 112% 4th Qtr)        
 
                        
Achievement of Annual
           Achieved at 104%        
 
Net Contribution
   $ 14,000     Of Plan   $ 14,000  
 
                    
 
 
           Total   $ 18,500  

Since the Division / Project Objective was 104% of Plan, the $18,500 would be increased by 112% (3% for each 1% over 100%) for a total payment of $20,720.

The total bonus paid to this participant would be $27,792.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 20

EXHIBIT D

Division Operating Personnel

                         
Base Salary:
   $ 100,000  
Target Bonus %:
     40%  
Target Bonus Amount:
   $ 40,000  
                         
Division/Project Financial Objectives
   $ 32,000 (80 %)
Company Financial Objectives
   $ 8,000 (20 %)
 
    
 
 
   $ 40,000 (100 %)

Corporate Financial Objectives
(@ 20% of Targeted Bonus, or $8,000)

                           
Net Income   Targeted   Hypothetical   Bonus
(@ 75% or $6,000)   Bonus   Result   Paid
 
 
 
 
                        
Achievement of 1st Quarter
   $ 225     Achieved   $ 225  
Achievement of 2nd Quarter
   $ 225     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 225     Achieved   $ 225  
Achievement of 4th Quarter
   $ 225     Not Achieved   No Payment
 
                        
Achieve Cumulative
   $ 225     Achieved 110% YTD   $ 225  
 
1st Quarter YTD Net Income
           (Achieved 110% YTD 1st Qtr)        
Achieve Cumulative
   $ 225     Achieved 102% YTD   $ 225  
 
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
Achieve Cumulative
   $ 225     Achieved 100% YTD   $ 225  
 
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
Achieve Cumulative
   $ 225     Achieved 104% YTD   $ 225  
 
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
 
                        
Achievement of Annual
   $ 4,200     Achieved @ 104%   $ 4,200  
 
Net Profit
           Of Plan        
Return on Capital
   $ 2,000     Achieved @ 100%   $ 2,000  
(@ 25% or $2,000)
           Of Plan        
 
                    
 
 
           Total   $ 7,550  

Since the Net Income was 104% of Plan and the Return on Capital achieved was 100% or better, the $7,550 bonus achieved would be increased by 112% (3% for each 1% Net Income over 100%) for a total bonus payment of $8,456.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 21

 

 

Division / Project Objectives
(@ 80% of Targeted Bonus, or $32,000)

                           
Net Contribution   Targeted   Hypothetical   Bonus
    Bonus   Result   Paid
     
 
 
 
                        
Achievement of 1st Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 2nd Quarter
   $ 1,200     Not Achieved   No Payout
Achievement of 3rd Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 4th Quarter
   $ 1,200     Not Achieved   No Payout
 
                        
Achievement of 1st Quarter
   $ 1,200     Achieved 110% YTD   $ 1,200  
 
Cumulative YTD
           (Achieved 110% YTD 1st Qtr)        
Achievement of 2nd Quarter
   $ 1,200     Achieved 102% YTD   $ 1,200  
 
Cumulative YTD
           (Achieved 94% 2nd Qtr)        
Achievement of 3rd Quarter
   $ 1,200     Achieved 100% YTD   $ 1,200  
 
Cumulative YTD
           (Achieved 96% 3rd Qtr)        
Achievement of 4th Quarter
   $ 1,200     Achieved 104% YTD   $ 1,200  
 
Cumulative YTD
           (Achieved 112% 4th Qtr)        
 
                        
Achievement of Annual
           Achieved at 104%        
 
Net Contribution
   $ 22,400     Of Plan   $ 22,400  
 
                    
 
 
           Total   $ 29,600  

Since the Division / Project Objective was 104% of Plan, the $29,600 would be increased by 112% (3% for each 1% over 100%) for a total payment of $33,152.

The total bonus paid to this participant would be $41,608.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 22

EXHIBIT DD

Division Operating Personnel
(In the event 100% of Return on Capital is not met)

                         
Base Salary:
   $ 100,000  
Target Bonus %:
     40%  
Target Bonus Amount:
   $ 40,000  
                         
Division/Project Financial Objectives
   $ 32,000 (80 %)
Company Financial Objectives
   $ 8,000 (20 %)
 
    
 
 
   $ 40,000 (100 %)

Corporate Financial Objectives
(@ 20% of Targeted Bonus, or $8,000)

                           
Net Income   Targeted   Hypothetical   Bonus
(@ 75% or $6,000)   Bonus   Result   Paid
 
 
 
 
                        
Achievement of 1st Quarter
   $ 225     Achieved   $ 225  
Achievement of 2nd Quarter
   $ 225     Not Achieved   No Payment
Achievement of 3rd Quarter
   $ 225     Achieved   $ 225  
Achievement of 4th Quarter
   $ 225     Not Achieved   No Payment
 
                        
Achieve Cumulative
   $ 225     Achieved 110% YTD   $ 225  
 
1st Quarter YTD Net Income
           (Achieved 110% YTD 1st Qtr)        
Achieve Cumulative
   $ 225     Achieved 102% YTD   $ 225  
 
2nd Quarter YTD Net Income
           (Achieved 94% 2nd Qtr)        
Achieve Cumulative
   $ 225     Achieved 100% YTD   $ 225  
 
3rd Quarter YTD Net Income
           (Achieved 96% 3rd Qtr)        
Achieve Cumulative
   $ 225     Achieved 104% YTD   $ 225  
 
4th Quarter YTD Net Income
           (Achieved 112% 4th Qtr)        
 
                        
Achievement of Annual Net Profit
   $ 4,200     Achieved @ 104%   $ 4,200  
 
           Of Plan        
 
                    
 
 
           Total   $ 5,550  
 
                        
Return on Capital
   $ 2,000     Achieved @ 68%   $ 1,360  
(@ 25% or $2,000)
           Of Plan        

Since the Net Income was 104% of the Plan, the Net Income bonus achieved of $5,550 will be increased by 112% (3% for each 1% over 100%) or $6,216, and added to $1,360 (ROC @ 16.8% — 15.4% =1.4% ÷ .15% =9.3% x 3% +40% = 68%) for a Corporate financial bonus of $7,576.

 

 

WCI Communities, Inc.
Management Incentive Compensation Plan
Page 23

 

 

Division / Project Objectives
(@ 80% of Targeted Bonus, or $32,000)

                           
Net Contribution   Targeted   Hypothetical   Bonus
    Bonus   Result   Paid
     
 
 
 
                        
Achievement of 1st Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 2nd Quarter
   $ 1,200     Not Achieved   No Payout
Achievement of 3rd Quarter
   $ 1,200     Achieved   $ 1,200  
Achievement of 4th Quarter
   $ 1,200     Not Achieved   No Payout
 
                        
Achievement of 1st Quarter
   $ 1,200     Achieved 110% YTD   $ 1,200  
 
Cumulative YTD (
           (Achieved 110% YTD 1st Qtr)        
Achievement of 2nd Quarter
   $ 1,200     Achieved 102% YTD   $ 1,200  
 
Cumulative YTD
           (Achieved 94% 2nd Qtr)        
Achievement of 3rd Quarter
   $ 1,200     Achieved 100% YTD   $ 1,200  
 
Cumulative YTD
           (Achieved 96% 3rd Qtr)        
Achievement of 4th Quarter
   $ 1,200     Achieved 104% YTD   $ 1,200  
 
Cumulative YTD
           (Achieved 112% 4th Qtr)        
 
                        
Achievement of Annual
           Achieved at 104%        
 
Net Contribution
   $ 22,400     Of Plan   $ 22,400  
 
                    
 
 
           Total   $ 29,600  

Since the Division / Project Objective was 104% of Plan, the $29,600 would be increased by 112% (3% for each 1% over 100%) for a total payment of $33,152.

The total bonus paid to this participant would be $40,728