Page 513 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Chapter 8. Long-Term Incentives 499

Stock Options
Number Shares Vested at Year End
Grant Option
Year Price Year 4 Year 5 Year 6 Year 7 Total
1 $57.50 15,000 15,000
2 45.50 15,000 15,000 30,000
3 78.50 — 15,000 15,000 30,000
4 105.00 — — 15,000 15,000 30,000

Total 30,000 30,000 30,000 15,000 105,000
Performance-Share Awards
Share Schedule Paid Out in First Quarter of…
Plan
Period Threshold Target Maximum Year 5 Year 6 Year 7 Year 8

1–4 1,000 10,000 25,000 15,000
2–5 1,000 10,000 25,000
3–6 1,000 10,000 25,000
4–7 1,000 10,000 25,000

Table 8-79. Long-term incentives worksheet for Ms. Jolly Goodshow

RE: Performance Share Plan
Ms. Jolly Goodshow:

As you know, you were included in the performance-share plan for the four-year period
ending last December. The Compensation Committee has determined the Company
achieved 120% of its earnings per share target. The Committee then certified that based
on the approved schedule, you are to be awarded 15,000 shares.

As of yesterday, the determination date of the award, your award was valued at $165,000.
By earlier correspondence, you were advised of the tax withholding and issuance
requirements. Your shares will be distributed to you six months from today due to a six-
month holding requirement under SEC Section 16.
The value of the award is not considered as earnings for the purposes of the company
retirement plan and its related supplemental plan. Nor is the value of the vested shares
considered earnings for the purposes of the company savings plan.

For your reference, attached is a copy of the original letter explaining the terms of your
performance-share plan. Since this is a copy of the original letter, the stated number of
shares has not been adjusted for last year’s stock split.
I.M. Right
Chair
Compensation Committee

Figure 8-7. Sample performance-share plan letter