Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers (e) Bonus Program
As set forth in the Compensation Discussion and Analysis in the proxy statement
for the 2020 annual meeting of stockholders of
For each named executive officer, 2020 bonus awards will continue to be tied to corporate performance goals for adjusted operating cashflow, core sales growth and adjusted earnings per share (the "Corporate Metrics"). However, performance goals for the Corporate Metrics will now be split between first quarter and second quarter ("First Half") 2020 performance and third and fourth quarter ("Second Half") 2020 performance, with First Half targets evaluated as performance against original budgets and Second Half targets evaluated based on performance against the Company's more recent internal forecasts (after the onset of the COVID-19 pandemic). In addition, to emphasize the importance of continuing to execute on the Company's strategic operational objectives, the Committee added additional full-year performance goals at the corporate and business unit level for the reduction of stock keeping units ("SKUs") and the achievement of annual cost of goods sold and indirect procurement savings goals under its "FUEL" initiative, a Company-wide program focused on margin enhancement. Participants in any business unit whose actual performance would have resulted in an aggregate payout above 100% under its original 2020 bonus targets for business unit operating income, core sales growth and adjusted operating cash flow will be entitled to an increase in the payout for the Corporate Metrics based on the business unit's performance relative to the original business unit targets, subject to the limitations on total payout described below.
Under the Bonus Plan generally, a payout between 0% and 200% would be determined by the Committee based on achievement of specified performance criteria for each applicable 2020 bonus award. However, in connection with the above referenced revision of performance criteria for the 2020 bonus awards, the Committee reduced the maximum payout percentage from 200% to 125% of any named executive officer's 2020 target bonus award. In addition, the Committee specified that no payment of a 2020 bonus award to any named executive officer shall exceed 100% of the individual's 2020 target bonus award if he or she would have earned less than a 100% payout under the applicable original performance goals previously adopted for 2020 bonus awards.
The named executive officers participate in the 2020 Bonus Plan with a target
payout equal to the percentage of their respective base salary as set forth
below. No revisions have been made to these percentages since their original
adoption in
Name : Target Payout as % of Base SalaryRavichandra K. Saligram 150 %Christopher H. Peterson 120 %Bradford R. Turner 100 %Laurel M. Hurd 75 %
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