CHRD » Topics » Bonus Compensation

This excerpt taken from the CHRD DEF 14A filed Jun 29, 2006.
Bonus Compensation. In the third quarter of fiscal 2005, the fiscal 2005 Bonus Plan (the “2005 Bonus Plan”) for executive officers, upon the recommendation of the Committee, was approved by the Board of Directors. The 2005 Bonus Plan established a target bonus level for each executive officer equal to a certain percentage of his base salary, which ranged from 40% to 80%, except for Mr. Mullen who has a bonus target of $500,000. A portion of the target bonus was payable quarterly depending upon whether the Company met certain financial benchmarks established by the Board. There were no personal objective benchmarks for fiscal 2005. The benchmarks were revenue, pro forma operating income, and net cash from operations, except in the case of Robert Mullen, where the financial benchmarks were revenue and net cash from operations. During fiscal 2005, we did not achieve the financial benchmarks established by the Board of Directors. As a result, no quarterly bonuses were paid to executive officers under the 2005 Bonus Plan other than to Mr. Mullen who did meet certain of his revenue and net cash goals.

Upon the recommendation of the Committee, the Board awarded spot bonuses to certain executive officers, including the chief executive officer, in the amounts set forth above in recognition of their individual efforts.

The Committee believes that the total cash compensation paid to the Company’s executive officers in fiscal 2005, as reflected in the Summary Compensation table above, was required to retain the persons with the skills necessary to run the Company’s business.

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