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This excerpt taken from the SMG DEF 14A filed Dec 20, 2006. Stock
Option and Equity-Based Incentive Plans
For the 2006 fiscal year, the Committee targeted the long-term
equity-based incentive awards for executive officers at the
50th percentile of total long-term equity-based incentive
pay at Comparison Group companies. The Committee uses the
Black-Scholes method to calculate the grant value of options,
and uses the Comparison Group companies as a benchmark. The
Committee adjusts grants of options and restricted stock from
such targets for certain recipients based on individual
performance. Stock options and restricted stock typically have a
three-year cliff vesting provision based strictly on continued
employment.
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