This excerpt taken from the ATU 8-K filed Nov 13, 2008.
2009 Annual Cash Incentive Plan.
On November 6, 2008, the Compensation Committee (the Committee) of the Board established the following management fiscal 2009 annual cash incentive awards under the Actuant Corporation Executive Officer Bonus Plan:
The fiscal 2009 annual cash incentive awards are based on year-over-year improvement in Combined Management Measure (CMM), and a financial or operational metric (MBO Metric) to be established. The fiscal 2009 annual cash incentive awards for corporate executives (Arzbaecher, Goldstein and Lampereur) will be based on year-over-year improvement in Actuants Consolidated CMM (90%) and MBO Metric (10%). The fiscal 2009 annual cash incentive plan for segment leaders (Blackmore) will be based on year-over-year improvement in Segment CMM (70%), year-over-year improvement in Actuants Consolidated CMM (20%) and MBO Metric (10%).
Consolidated CMM = Net earnings before interest, taxes, minority interest and amortization, less the Carrying Charge.
Carrying Charge = [20% x (debt + shareholders equity + accumulated amortization of intangible assets cash gross intangibles gross goodwill + deferred tax liabilities)] + [ 12% x (gross intangibles + gross goodwill deferred tax liabilities)]
Segment CMM = Operating Profit (before amortization) less an asset carrying charge equal to 20% of Segment Net Assets Employed.
Segment Net Assets Employed = Net accounts receivable + net inventory + prepaid assets + net fixed assets + other long-term assets (excluding intangible assets) accounts payable accrued compensation and benefits accrued current liabilities.
Both Consolidated and Segment CMM are calculated on a constant currency basis.
Annual Cash Incentive Targets:
Actual cash incentive payments can range from 0% to 250% of the target incentive based on actual performance. The following table sets forth the annual cash incentive opportunities for the Named Executive Officers for fiscal 2009: