This excerpt taken from the HAS DEF 14A filed Apr 6, 2009.
Summary Description of the 2009 Performance Plan
The following is a summary description of the 2009 Performance Plan and is therefore not complete. A complete copy of the 2009 Performance Plan is annexed to this proxy statement as Appendix D.
The 2009 Performance Plan will be administered by the Compensation Committee of the Board of Directors. The Committee has the sole authority to select participants under the 2009 Performance Plan, to set Performance Goals (as defined below) for participants and to make rules and regulations for the administration of the 2009 Performance Plan. The interpretations and decisions of the Committee with regard to the 2009 Performance Plan are final and conclusive, and the Committee has the full power and authority in its sole discretion to reduce, or to refuse to make (but not to increase), any payment payable as a result of the achievement of a Performance Goal.
Eligibility for participation in the 2009 Performance Plan is limited to executive officers of the Company who are selected in the sole discretion of the Committee. No person is automatically entitled to participate in the 2009 Performance Plan in any plan year. Awards under the 2009 Performance Plan will be made only to those executive officers whose remuneration for the year is expected to potentially be subject to the Section 162(m) deduction
limitation. The 2009 Performance Plan is intended to replace the 2004 Performance Plan for awards made in fiscal 2010 and thereafter. The participants in the Companys existing 2004 Performance Plan, as selected by the Committee for the 2009 fiscal year, are Brian Goldner, the Companys President and Chief Executive Officer, and David D.R. Hargreaves, the Companys Chief Operating Officer and Chief Financial Officer. However, in future years, the Committee may select other executive officers to be eligible for participation under the 2009 Performance Plan. For 2009 the Committee has established net revenue, operating margin and free cash flow performance metrics which will, based on the Companys performance against those metrics in fiscal 2009, determine Mr. Goldners and Mr. Hargreaves potential incentive awards under the 2004 Performance Plan for 2009.
The Committee will designate one or more performance goals under the 2009 Performance Plan for each fiscal year (each a Performance Goal) for each participant. Each Performance Goal will be established in writing no later than ninety (90) days after the commencement of the period of service to which the performance relates (or such earlier time as is required to qualify the performance award as performance-based under Section 162(m) of the Code).
The Performance Goals for each participant shall be objectively determinable measures of performance based on any one or a combination of the following criteria for the fiscal year: cash net earnings; core brands growth; core brands net revenues; cost control; earnings before income taxes; earnings before interest and taxes; earnings before interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; economic value added; free cash flow; gross profit; net cash provided by operating activities; net earnings; earnings per share; net earnings per share; net revenues; operating margin; operating profit; return on assets; return on capital investment; return on net revenues; return on shareholders equity; sales; stock price; total shareholder return on common stock relative to S&P 500 Index; total shareholder return on common stock relative to Russell 1000 Consumer Discretionary Index and working capital. These business criteria may be measured (i) on a consolidated basis or (ii) on the basis of performance in a segment, division, sector or other business unit (including the performance of one or more designated products or brands), all as selected by the Committee in each individual case.
Determination of Benefits
The Committee will designate the Performance Goals for each participant in the 2009 Performance Plan for every fiscal year and will also establish the maximum amount, expressed as a percentage of Earned Salary (as defined in the 2009 Performance Plan) that will be payable to each participant if the Performance Goals for such participant are achieved at specified levels. In no event will the amount paid to any one individual as a performance award under the 2009 Performance Plan in respect of any given fiscal year exceed the lesser of 300% of that individuals base salary for the year in question or $4.0 million.
Payment of Awards
All performance awards under the 2009 Performance Plan with respect to a fiscal year will be paid by March 15 of the following fiscal year.
Estimate of Benefits
The amounts that will be paid pursuant to the 2009 Performance Plan are discretionary and are therefore not currently determinable. However, two executive officers have been selected to participate in the existing 2004 Performance Plan for fiscal 2009. The 2009 Performance Plan will replace the 2004 Performance Plan for awards made in fiscal 2010 and thereafter. The table set forth below provides the maximum bonus which can be paid for 2009 to each of the two executive officers chosen to participate in the 2004 Performance Plan in 2009, based on their current salary, as well as the actual bonuses those two officers received under the 2004 Performance Plan, with
respect to their services in 2008. Changes in salary for one or both of the officers in fiscal 2009 may change the amounts set forth in the table.
If the shareholders do not approve the 2009 Performance Plan, the Company may not be able to take a tax deduction for some or all of the management incentive award compensation which it pays to its Covered Employees for fiscal 2010 and subsequent years.
Amendment or Termination
The Committee may terminate or suspend the 2009 Performance Plan in whole or in part at any time, and may amend the 2009 Performance Plan from time to time in any respect, provided that no amendment for which shareholder approval is required either by the Code in order to assure the deductibility by the Company of payments payable under the 2009 Performance Plan, or by other applicable law, will be effective without such shareholder approval having been obtained. The 2009 Performance Plan, if approved by the Companys shareholders, will remain in full force and effect for future fiscal years of the Company unless amended or terminated by the Committee. However, under Section 162(m), the exemption for performance-based compensation would not be available for awards beyond 2014 unless the 2009 Performance Plan is reapproved by shareholders.
The affirmative vote of a majority of the shares of Common Stock present (in person or by proxy) and entitled to vote at the Meeting on the 2009 Performance Plan is required for approval of the 2009 Performance Plan. Abstentions are considered shares entitled to vote on the proposal and as such abstentions are the equivalent of a vote against the proposal. In contrast, broker non-votes are not counted as present and entitled to vote on the proposal for purposes of determining if the proposal receives an affirmative vote of a majority of the shares present and entitled to vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE 2009 PERFORMANCE PLAN.