This excerpt taken from the BWS DEF 14A filed Apr 14, 2009.
Long-Term Incentive Awards
Long-term performance awards granted in 2006, 2007 and 2008 cover a three-year performance period, so that at certain times there may be outstanding awards covering three overlapping performance periods. Based on the awards metrics (which were Adjusted EPS and compound annual net sales growth for awards granted in 2006, 2007 and 2008), a grid of performance levels determines the performance percentage of the target award payable at the end of the performance period. Outstanding performance share awards were denominated for a target number of performance shares. Outstanding performance unit awards, which were granted for the first time in March 2008, were comprised of a target performance share award as well as a target performance cash award. The performance cash award specifies a target cash amount, and provides for a cash payout at the end of the performance period to be calculated by multiplying the performance percentage achieved by the target cash value. Subject to achieving the minimum cumulative Adjusted EPS at the end of the three-year period, the target shares or cash payout can result from different combinations of the performance metrics, with the maximum payment being 200% of the target award. Fluctuations in the price of our stock during the performance period will affect the ultimate value of the performance share award, but not the performance cash award. To receive any payout under this award, the NEO must be an employee at the end of the performance period.
In March 2009, the Compensation Committee determined that the 2006-2008 award would not be payable as the Company did not meet the minimum Adjusted EPS. In addition, we believe that meeting the minimum performance thresholds for payment on the 2007-2009 and 2008-2010 awards is highly unlikely. Thus, our consolidated financial statements for 2008 reflect the reversal of previously recorded expense for these awards, although the Outstanding Equity Awards at Fiscal Year-End table, as required by SEC rules, reflects potential payments for these awards at target level. Given current expectations and the desire to use shares available under our 2002 incentive plan for other awards, the holders of long-term incentive awards for the 2007-2009 and 2008-2010 performance periods have been requested to amend award agreements to provide that the performance share payout, if any, will be
made in cash rather than in shares; and as of March 31, 2009, amendments have been signed for all of the NEOs and nearly all other participants holding these awards. The 2008-2010 long-term incentive awards are described in the CD&A under the caption Long-Term Incentives 2008-2010 and Equity Grants.