CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions of This Agreement Which Have Been Redacted
Are Marked With Brackets ("[***]"). The Omitted Material Has Been Filed
Separately With The United States
Securities and Exchange Commission.
PRG-Xxxxxxx
Performance Bonus Plan
Effective January 2006
[COMPANY LOGO]
Please note that information contained in this document is proprietary and
confidential, as defined in your employment agreement and/or *PRG-Xxxxxxx
Employee Handbook. Employees are reminded that confidential, sensitive or
proprietary information concerning XXX-Xxxxxxx must not be used in any manner
that is unauthorized or detrimental to the best interests of XXX-Xxxxxxx. No
unauthorized distribution is permitted.
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
I. PLAN OVERVIEW..........................................................3
A. Philosophy.........................................................3
B. Plan Objectives....................................................3
C. Effective Period...................................................3
D. Eligibility........................................................3
II. PLAN DESCRIPTION......................................................3-7
A. Target Bonus and Maximum Bonus......................................3
B. Actual Bonus to be Paid: The Concept...............................4
C. Calculation of Total Bonus Pool.....................................4
D. Calculation of Operating Group Bonus Pools..........................5
E. Allocation to Bonus Eligible Employees of Amounts up to
the Target Bonus Pool..............................................6
F. Allocation of any Excess Pool to Bonus Eligible Employees ..........6
G. Qualification for and Payment of Bonus .............................7
III. PLAN INTERPRETATION AND ADMINISTRATION..................................8
IV. PLAN ACKNOWLEDGEMENT FORM...............................................9
CONFIDENTIAL 2
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
I. PLAN OVERVIEW
A. PHILOSOPHY
XXX-Xxxxxxx, as an organization of professionals, believes that its
senior leaders should have common objectives and should share together
in the profits created by their combined efforts as a team. In
addition, the company wants to encourage its leadership to achieve
desired results and to strive for excellence through exemplary
behaviors, creativity, innovation and teamwork.
B. PLAN OBJECTIVES
The PRG-Xxxxxxx Performance Bonus Plan (the Plan) promotes the
following:
o Achievement of XXX-Xxxxxxx business and financial objectives
o Collaboration throughout the organization
o Customer/client relations
o Development of PRG-Xxxxxxx leaders
C. EFFECTIVE PERIOD
The Plan is effective from January 1 through December 31, 2006.
D. ELIGIBILITY
Full-time, salaried PRG-Xxxxxxx employees whose positions are assigned
a Level 14E or higher in the PRG-Xxxxxxx U.S. salary grade structure
and employees that hold positions of a comparable level in
PRG-Xxxxxxx'x non-U.S. operations (excluding Meridian) are eligible to
participate in the Plan (Bonus Eligible Employees). The term "Bonus
Eligible Positions" refers to the positions described in this
paragraph.
II. PLAN DESCRIPTION
The Plan provides for a bonus payment in 2007 to Bonus Eligible Employees
upon the achievement of by the company of certain 2006 financial
objectives, subject to the more detailed Plan description below.
A. TARGET BONUS AND MAXIMUM BONUS
Each Bonus Eligible Position has associated with it a specific target
bonus (Target Bonus) and maximum bonus (Maximum Bonus).
The sum of the Target Bonuses for all Bonus Eligible Positions is the
"Target Bonus Pool" for the company as a whole. The sum of the Maximum
Bonuses for all Bonus Eligible Positions in the plan is the "Maximum
Bonus Pool" for the company as a whole.
CONFIDENTIAL 3
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
B. ACTUAL BONUS TO BE PAID: THE CONCEPT
The actual bonus to be paid to any Bonus Eligible Employee will be a
function of three things:
o The Total Bonus Pool (described below) earned by the company as a
whole.
o The portion of the Total Bonus Pool allocated to the Operating
Group within the company to which the Bonus Eligible Position is
assigned (the Operating Group Bonus Pool). For purposes of this
Plan there are four Operating Groups:
o Corporate
o United States
o Europe
o APLAC
o The portion of the Operating Group Bonus Pool allocated to each
Bonus Eligible Employee within the Operating Group.
C. CALCULATION OF TOTAL BONUS POOL
The Total Bonus Pool begins to accumulate once EBITDAOT exceeds
$[******]. For purposes of this Plan the term "EBITDAOT" means the
company's earnings before (1) interest, taxes, depreciation and
amortization, (2) one time charges such as severance expenses and
expenses associated with dark leases, and (3) bonuses payable under
this Plan.
All EBITDAOT in excess of $[******] will go into the Total Bonus Pool
until the Total Bonus Pool reaches the Target Bonus Pool (calculated
at $[******] based on the Target Bonuses of all currently employed
Bonus Eligible Employees). Once the Total Bonus Pool equals the Target
Bonus Pool, half of all additional EBITDAOT (in excess of the sum of
$[******] and the amount of the Target Bonus Pool) will go into the
Total Bonus Pool until it reaches the Maximum Bonus Pool, (calculated
at $[******], based on the Maximum Bonuses of all currently employed
Bonus Eligible Employees).
[***] - CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE
MARKED WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL 4
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
The Total Bonus Pool will, therefore, be a function of the company's
total EBITDAOT. If EBITDAOT is $[******] or less, the Total Bonus Pool
available for payment of bonuses under this Plan will be zero. Based
on Target Bonuses of currently employed Bonus Eligible Employees, (1)
if EBITDAOT equals $[******], then the Total Bonus Pool will be equal
to the Target Bonus Pool, (2) if EBITDAOT is $[******], then the Total
Bonus Pool will be half of the Target Bonus Pool or $[******]; and (3)
if EBITDAOT is $[******], then the Total Bonus Pool will be 1.5 times
the Target Bonus Pool or $[******] (100% of EBITDAOT in excess of
$[******] until the Total Bonus Pool equals $[******], plus 50% of
EBITDAOT in excess of $[******]).
D. CALCULATION OF OPERATING GROUP BONUS POOLS
All of the Total Bonus Pool up to the company's Target Bonus Pool will
be allocated to the Operating Group Pools, pro rata, based on the
relationship that the sum of all Target Bonuses of all Bonus Eligible
Employees within each Operating Group bears to the Target Bonus Pool.
For example, if the sum of the Target Bonuses of all Bonus Eligible
Employees within an Operating Group was 25% of the Target Bonus Pool,
that Operating Group will receive an allocation of 25% of that portion
of the Total Bonus Pool that is less than or equal to the Target Bonus
Pool.
If the company's Total Bonus Pool is greater than the Target Bonus
Pool, then the amount by which the Total Bonus Pool exceeds the Target
Bonus Pool (the Excess Pool) will be allocated among the Operating
Groups as follows:
o The Corporate Operating Group will be allocated its pro rata
portion of the Excess Pool, based on the relationship of the sum
of all Maximum Bonuses of all Bonus Eligible Employees within the
Corporate Group to the Maximum Bonus Pool.
o Each Operating Group other than Corporate will get an allocation
of the remainder of the Excess Pool, based on the relationship
between that Operating Group's dollar contribution to the Excess
Pool and the total Excess Pool.
For example, assume the company's Total Bonus Pool was $[******] and
all of the Excess Pool was generated by Europe, i.e.
[***] - CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE
MARKED WITH BRACKETS ("[***]"). THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
CONFIDENTIAL 5
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
United States and APLAC made their EBITDAOT budget while Europe
exceeded their EBITDAOT budget by $2 million. In this case, the $2
million of Excess Pool would be allocated as follows:
o The Corporate Operating Group would get a portion of the Excess
Pool equal to its pro rata portion (based on the relationship of
aggregate Maximum Bonuses of the Corporate Group's Bonus Eligible
Employees to the Maximum Bonus Pool as described above) of the
Excess Pool.
o The entire remainder of the Excess Pool would then be allocated
to the Europe Operating Group.
E. ALLOCATION TO BONUS ELIGIBLE EMPLOYEES OF AMOUNTS UP TO THE TARGET
BONUS POOL
For amounts in the Total Bonus Pool up to the Target Bonus Pool, the
allocation of the Operating Group Bonus Pools to Bonus Eligible
Employees within each Operating Group will be based on the each Bonus
Eligible Employee's pro rata portion of the Operating Group Bonus Pool
(based on the relationship between the Bonus Eligible Employee's
Target Bonus and the sum of all Target Bonuses for all Bonus Eligible
Employees in that Operating Group).
For example, if the Operating Group Bonus Pool for the U.S. Operating
Group is $1,000,000 and the Target Bonus for the Bonus Eligible
Employee is 2% of the sum of the Target Bonuses of all Bonus Eligible
Employees in the U.S. Operating Group, then this Bonus Eligible
Employee should generally expect a bonus of $20,000.
At the discretion of the head of the Operating Group, some Bonus
Eligible Employees within the Operating Group could be paid a bonus
somewhat higher, or somewhat lower, than their pro rata portion of the
Operating Group Bonus Pool. These exceptions will be based on
individual performance and must be approved in advance by the
company's SVP-Human Resources and CEO. Since the Operating Group Bonus
Pool will be a fixed amount, if any Bonus Eligible Employee receives
more than a pro rata portion (based on Target Bonuses as described in
the first paragraph of this subsection), one or more other Bonus
Eligible Employees must receive less than their pro rata amount.
Exceptions to the pro rata allocation of Operating Group Bonus Pools
less than or equal to the Target Bonus Pool are expected to be rare,
and more detailed guidelines will be developed during the course of
the year to guide Operating Group heads in determining whether an
exception should be made to the pro rata allocation in a particular
circumstance.
CONFIDENTIAL 6
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
F. ALLOCATION OF ANY EXCESS POOL TO BONUS ELIGIBLE EMPLOYEES
Any portion of any Excess Pool allocated to an Operating Group as
described above (Operating Group Excess Pool) will be allocated within
the Operating Group to Bonus Eligible Employees only after the
allocation to Bonus Eligible Employees of the Target Bonus Pool as
described in the Plan subsection immediately above. The allocation of
excess Operating Group Excess Pool will be made based on the
recommendation of the head of the Operating Group and approved by the
company's SVP- Human Resources and CEO.
More detailed guidelines for the allocation of Operating Group Excess
Pool will be developed and communicated during the course of the year.
In general, these guidelines will give emphasis to EBITDAOT
contribution of the Bonus Eligible Employee's work unit and the Bonus
Eligible Employee's individual performance, and will follow the pool
concept on which this Plan is based. For example, if Europe has an
Operating Group Excess Pool of $1,500,000 which was generated entirely
by EBITDAOT over budget in Southern Europe, it is likely that Bonus
Eligible Employees in Southern Europe will get than more than their
pro rata portion of the $1,500,000, while Bonus Eligible Employees in
Northern Europe and the U.K. will get less than their pro rata
portion. In this example, most Northern Europe and U.K. Bonus Eligible
Employees will receive their Target Bonuses. Most Bonus Eligible
Employees in Southern Europe, however, will receive their Target Bonus
plus some or all of the difference between their Maximum Bonus and
Target Bonus.
G. QUALIFICATION FOR AND PAYMENT OF BONUSES
Bonus Eligible Employees must have at least a satisfactory performance
rating during the Plan year and at the time bonus payments are made to
be eligible to receive a bonus payment under this Plan.
Bonuses will be paid annually, and in most cases within thirty (30)
days after completion of the annual audit of the company's 2006
results.
Bonus Eligible Employees must be actively employed by XXX-Xxxxxxx at
the time of the payment in order to receive a bonus. Exceptions to
this requirement may be made in connection with terminations due to
retirement, disability or death.
If an employee becomes eligible to participate in the PRG-Xxxxxxx
Performance Bonus Plan after January 1st (by beginning work in a Bonus
Eligible Position), he/she may be eligible for a prorated payout based
on the date of entry into the Plan, but may not enter the plan after
November 1st.
CONFIDENTIAL 7
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
III. PLAN INTERPRETATION AND ADMINISTRATION
Overall responsibility for the administration of the Plan resides with
the SVP-Human Resources.
All bonus payments are subject to the approval of the company's
SVP-Human Resources, CEO, and the Compensation Committee of the
company's Board of Directors.
The company reserves the right to discontinue or amend the Plan. Such
changes could include, for instance, the revision of the company's
financial targets in the event of business or organizational changes,
including acquisitions and divestitures, deemed to warrant such
action. This Plan is a discretionary bonus plan and confers no rights
to Bonus Eligible Employees or other employees. Authority and
responsibility for interpretation and application of the Plan rest
solely with the company's SVP-Human Resources, CEO and the
Compensation Committee of the company's Board of Directors.
[This space intentionally left blank.]
CONFIDENTIAL 8
PRG-Xxxxxxx Performance Bonus Plan
--------------------------------------------------------------------------------
IV. PLAN ACKNOWLEDGEMENT FORM
I have received and reviewed the terms of the 2006 PRG-Xxxxxxx Performance Bonus
Plan. I understand and agree that this Plan does not create a contract of
employment between the PRG-Xxxxxxx and me.
Position: ________________________________
2006 Target Bonus: _______________
2006 Maximum Bonus: _______________
--------------------------------------------------------------------------------
Employee's Signature Date
--------------------------------------------------------------------------------
Employee's Name (typed or printed)
PLEASE FORWARD THE COMPLETED EMPLOYEE ACKNOWLEDGMENT FORM TO XXXXXX XXXXXXXX IN
HUMAN RESOURCES IN ATLANTA.
CONFIDENTIAL 9
