Summary of Executive Bonus Plan for Executive Officers
This agreement outlines the Executive Bonus Plan for executive officers, providing for an annual cash bonus based on the company's net income goals and individual performance targets set at the start of the year. Each executive's bonus is determined by a formula, with 40% tied to individual goals and the remainder based on a percentage of net income, subject to a cap. The Compensation Committee sets target amounts and participation percentages. The Vice President of Worldwide Sales is compensated under a separate sales commission plan.
Exhibit 10.8
Summary of Executive Bonus Plan
The Executive Bonus Plan provides for an annual cash bonus based upon net income goals set at the beginning of the year, as well as upon the achievement of individual goals. A target incentive compensation amount and a specific participation percentage for each executive officer were established by the Compensation Committee of the Board of Directors with reference to the officer’s area and scope of responsibility with the Company.
The cash bonus payable to executive officers under the Plan is calculated based on a formula. The formula provides that 40% of the assigned target incentive compensation amount can be earned through performance of individual goals and that the remaining portion of the cash bonus is calculated as a percentage of net income based on each officer’s specific participation percentage. In addition, the total cash bonus payable based on net income achieved is subject to a maximum amount not to exceed 3.5 times 60% of the target incentive compensation amount.
The Vice President of Worldwide Sales receives incentive compensation under the Company’s sales commission plan.
