EX-10.1 2 a06-13728_1ex10d1.htm EX-10.1

Exhibit 10.1

Annex A to the SIRVA, Inc. Management Incentive Plan

 

 

2006 Management Incentive Plan

 

 

SIRVA, Inc.

 

January 2006

 



Section 1 - Plan Overview & Purpose

SIRVA, Inc (ďSIRVAĒ) strives to provide its associates with competitive salaries and benefits as a total compensation package. SIRVA has established the SIRVA, Inc. Management Incentive Plan (the ďMIP PlanĒ) to enable the Company and its subsidiaries to attract, retain, motivate and reward the best qualified executive officers and key employees by providing them with the opportunity to earn competitive compensation directly linked to the Companyís performance. In addition to a competitive compensation package, this SIRVA 2006 Management Incentive Plan (the ď2006 PlanĒ) has been established under the MIP Plan to improve accountability for results and to supplement SIRVAís competitive compensation packages with an Incentive Award for those Participants who deliver on specific quantitative and qualitative targeted goals and objectives during 2006. All Incentive Awards under the 2006 Plan shall be paid from the general assets of SIRVA. This 2006 Plan is subject to the terms and conditions of the MIP Plan.

Section 2 ó Plan Definitions

As used in the 2006 Plan, the following terms, when capitalized, shall have the meanings set forth below in this Section 2. Other capitalized terms used herein without definition shall have the respective meanings set forth in the MIP Plan.

Section 2.01. Accounting Strategic Objectives is a Performance Measurement under this 2006 Plan that measures the accomplishment of certain pre-approved accounting initiatives for any Participant within the Accounting department during the 2006 Incentive Year.

Section 2.02. Actual Award Percentage or Pay-out Percentage means the percentage of pay-out, if any, determined for each Performance Measurement in the 2006 Incentive Year based upon actual results of each such Performance Measurement in relation to Target Performance Levels established by the Compensation Committee (as set forth in Table A, which is attached hereto and incorporated herein by reference) and the weight given to each such Performance Measurement as determined by the Compensation Committee (as set forth in Table B which is attached hereto and incorporated herein by reference).

Section 2.03. Average Base Salary means the weighted average of the Participantís base salary for the 2006 Incentive Year, which has been prorated for any base salary changes based on the number of days at each such base salary level. Average Base Salary excludes bonuses, incentives, awards, commissions, disability and salary continuation benefits, perquisites, fringe benefits or other imputed income.

Section 2.04. Award Dollar Minimum means the minimum amount of an Incentive Award a Participant is eligible to receive under this 2006 Plan. A Participantís Award Dollar Minimum amount is determined by multiplying the Participantís Award Percentage Minimum by the Participantís Average Base Salary.

Section 2.05. Award Dollar Maximum means the maximum amount of an Incentive Award a Participant is eligible to receive under this 2006 Plan. A Participantís Award Dollar Maximum amount is determined by multiplying the Participantís Award Percentage Maximum by the Participantís Average Base Salary.

Section 2.06. Award Percentage Minimum means the minimum percentage level of participation established for each Participant under the 2006 Plan. Award Percentage Minimum

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is generally established by the participantís salary band level, but is subject to change in the sole discretion of the Compensation Committee.

Section 2.07. Award Percentage Maximum means the maximum percentage level of participation established for each Participant under the 2006 Plan. Award Percentage Maximum is generally established by the participantís salary band level, but is subject to change in the sole discretion of the Compensation Committee.

Section 2.08. Business Segment is the major business segment or support function of SIRVA through which a Participant is employed. For purposes of this 2006 Plan, the following are considered Business Segments of SIRVA: Global Relocation, North American Moving Services, Europe Moving Services, Asia Pacific Moving Services and SIRVA, Inc. SIRVA, Inc. will be the performance measure for all the function groups.

Section 2.09. Cash Generation is a SIRVA Cash Performance Measurement under this 2006 Plan.

Section 2.10. Earnings Growth is the SIRVA Performance Measurement under this 2006 Plan that is measured by SIRVAís Operating Income performance.

Section 2.11. 2006 Incentive Year means the performance period beginning on January 1, 2006 and ending on December 31, 2006.

Section 2.12. Incentive Award means the amount payable to a Participant under the 2006 Plan for the 2006 Incentive Year. This amount is determined by multiplying the Participantís Actual Award Percentage for the 2006 Incentive Year times the Participantís Average Base Salary paid during the 2006 Incentive Year, subject to deductions resulting from any of the following: i) failure of SIRVA to achieve its Earnings Growth & Cash Generation Minimums; ii) failure of the Participantís Business Segment in achieving its Earnings Growth; iii) failure of a Participant to fully achieve the Leadership and Strategic Initiatives established for the Participant; and, iv) failure of the Participant to otherwise perform at the expected level established for the Participant by the Company, in each case as determined by the Compensation Committee in its sole discretion.

Section 2.13. Leadership and Strategic Initiatives is a Performance Measurement under this 2006 Plan that measures the accomplishment of certain pre-approved Leadership and Strategic Initiatives for a respective Participantís business segment or function during the 2006 Incentive Year. Strategic Initiatives shall be established for each Participantís business unit or function in accordance with Section 4.04 of this 2006 Plan. In addition, the Participant will be evaluated on his/her demonstration of Leadership traits and values in completion of the job.

Section 2.14. Minimum Performance Level or Minimum means the threshold level of performance established by the Compensation Committee for each SIRVA Performance Measurement during the 2006 Incentive Year, as set forth in Table A.

Section 2.15 Minimum Incentive Payout means that the Plan will not pay an Incentive Award if the gross amount of the Incentive Award otherwise payable is less than $100.00.

Section 2.16. Operating Income is defined as gross profit minus operating expenses. It measures the pre-tax, pre-interest profit from the companyís operations.

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Section 2.17. Participant means a regular employee of a SIRVA-Controlled Company who satisfies the requirements for eligibility under Section 3 of this 2006 Plan. Notwithstanding the foregoing, employees covered under other incentive/commission or bonus plans shall not be eligible to participate in the 2006 Plan. In addition, individuals classified as independent contractors or temporary employees are not eligible to participate.

Section 2.18. Performance Measurements for the 2006 Incentive Year means Earnings Growth, Cash Generation, Leadership and Strategic Initiatives, and Accounting Strategic Objectives.

Section 2.19. SIRVA-Controlled Companies means North American Van Lines, Inc. (ďNAVLĒ), and any direct or indirect subsidiaries of NAVL, including, but not limited to, Allied Van Lines, Inc., SIRVA Relocation, LLC and SIRVA Canada, LP, and any other corporation in which the Company owns, directly or indirectly, stock representing 80% or more of the combined voting power of all classes of stock entitled to vote, and any other business organization, regardless of form, in which the Company possesses, directly or indirectly, 80% or more of the total combined equity interests in such organization.

Section 2.20. Target Performance Level or Target means the budgeted level of performance established for each Performance Measurement during the 2006 Incentive Year, as set forth in Table A.

Section 3 - Eligibility

For the 2006 Incentive Year, an associate employed by a U.S. based SIRVA-Controlled Company who is: i) within the senior professional salary band or higher (e.g., a senior executive, senior vice president, senior professional, executive vice president or director); and ii) not participating in another incentive plan or bonus program for the 2006 Incentive Year (unless that other plan or program specifically provides that the incentive or bonus payable is in addition to any Incentive Award payable under the 2006 Plan; and iii) not covered by any collective bargaining agreement (unless that agreement specifically provides for participation), shall be eligible to participate in the 2006 Plan, but subject to the 2006 Planís terms and conditions. In addition to the foregoing, the Compensation Committee (or its delegate), may, in its sole discretion, extend participation under this 2006 Plan to any other employee of a SIRVA-Controlled Company, including, without limitation, key associates employed by a SIRVA-Controlled Company based outside the United States. Where such discretion is exercised to extend participation under this 2006 Plan to such key associates, the Company reserves the right to terminate that participation at any time.

Section 4 ó Incentive Awards

The 2006 Plan has specific, quantifiable Operating Income and Cash Generation performance goals for SIRVA. The 2006 Plan also includes demonstrated Leadership values and Strategic Initiatives or Accounting Strategic Initiatives for each Participant. A one-over-one evaluation process will be used to determine if a Participantís performance has achieved the targeted goals for Leadership and Strategic Initiatives or Accounting Strategic Initiatives.

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Section 4.01. General Threshold

a)                Subject to the terms of the 2006 Plan, a Participant shall be eligible to receive an Incentive Award for the 2006 Incentive Year, calculated in accordance with this Section.

b)                Each portion of the Incentive Award calculation ó Operating Income-Business Segment, Operating Income-SIRVA, Cash, Leadership and Strategic Initiatives, and/or Accounting Strategic Initiatives ó is determined separately. Thus, a Business Segment could receive the portion of its award attributable to SIRVA, Inc. Cash and not receive anything for Operating Income. Alternatively, a Business Segment could receive all or a portion of its award for Operating Income and not SIRVA, Inc. Cash.

c)                Subject to adjustment and final approval by the Compensation Committee (or its delegate where appropriate), the Business Segment leader shall determine the Incentive Award for each Participant within his/her Business Segment in accordance with the terms of the 2006 Plan. Before establishing the Incentive Award, the Business Segment leader shall assess each Participantís Leadership performance as well as each Participantís contribution towards the achievement of the Strategic Initiatives established for each such Participantís Business Segment. Once the Business Segment leader has evaluated the Participantís individual performance, the Business Segment leader shall establish an Incentive Award for such Participant commensurate with such level of performance using the Participantís respective Target Award Percent as a guideline. A similar process will be followed by the CEO with respect to Business Segment Leaders and by the Chairman with respect to the CEO, in both instances subject to final approval by the Compensation Committee.

d)                In the event a Participant was not eligible for participation in the 2006 Plan for the entire 2006 Incentive Year, the amount of the Incentive Award shall be determined in accordance with Sections 4.05 or 4.06 hereof. In addition, the Participantís Business Segment will determine the Operating Income-Business Segment actual award and SIRVA, Inc. will determine Cash Generation and Operating Income-SIRVA actual awards. Actual Award Percentages can vary by Business Segment.

Section 4.02. Earnings Growth. If the 2006 minimum Operating Income ó Business Segment target is reached, the Operating Income ó Business Segment financial award will be calculated based on each Business Segmentís performance against its individual Business Segment targets. If the 2006 minimum Operating Income ó SIRVA target is reached, the Operating Income ó SIRVA financial award will be calculated based on SIRVAís performance against its targets.

Section 4.03. Cash Generation. The Cash Generation Performance Measurement is based upon SIRVA achieving the Minimum Performance Level for the 2006 Incentive Year.

Section 4.04. Leadership and Strategic Initiatives. A Participantís performance during the 2006 Incentive Year will be evaluated based upon the successful completion of the established Leadership and Strategic Initiatives for the Participantís Business Segment for the 2006 Incentive Year. The established Leadership and Strategic Initiatives for each Participantís Business Segment should be targeted, quantifiable, and/or otherwise measurable and shall be set forth in a Performance Partnering Assessment form, which, once approved, shall be incorporated into this 2006 Plan by this reference. The Compensation Committee can make an adjustment (either higher or lower) to any Leadership and Strategic Initiative assessment made

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by a Business Segment Leader. If SIRVA, Inc. does not meet its minimum Operating Income, the Leadership and Strategic Initiative of the award will not be paid.

Section 4.05. Accounting Strategic Objectives. The performance of a Participant who is a member of the Accounting department during the 2006 Incentive Year will be evaluated based upon the successful completion of the established Accounting Strategic Objectives for the 2006 Incentive Year. The established Accounting Strategic Objectives for each Participant should be targeted, quantifiable, and/or otherwise measurable and shall be set forth in a Performance Partnering Assessment form, which, once approved, shall be incorporated into this 2006 Plan by this reference. The Accounting Strategic Objective will comprise 75% of the target performance level for any Participant who is a member of the Accounting department.

Section 4.06. Partial Year Participation. Participants that are hired, promoted, demoted, transferred, or otherwise moved to a different salary band level during the 2006 Incentive Year will be eligible on a pro-rated basis for the portion of the 2006 Incentive Year the associate fell within each such respective eligible salary band level. Participants must be hired or promoted into an eligible band level before December 1, 2006. Pro-rations will be calculated on a daily basis. The Incentive Award, if any, will be based upon the Participantís Average Base Salary as of the end of the 2006 Incentive Year. For example, a Participant transferring to a non-participating SIRVA company or a non-eligible position within SIRVA for the final six (6) months of the 2006 Incentive Year will only be eligible for 50% of the Incentive Award otherwise payable and such Incentive Award will be based upon the Participantís Average Base Salary during the entire 2006 Incentive Year.

Section 4.07. Termination. Except as otherwise set forth herein, any Participant who leaves employment with SIRVA for any reason prior to the payment of any Incentive Award shall not be eligible nor will such Participant be considered to have earned any Incentive Award for the 2006 Incentive Year. An award will be made to a Participant who participated in the 2006 Plan during the 2006 Incentive Year for the entire year, and who, between the end of the 2006 Incentive Year and the time when Incentive Awards for the 2006 Incentive Year are paid by SIRVA, retires at the normal retirement age of 65 or whose employment terminates as a result of death or disability. In the event of the death of a Participant during the 2006 Incentive Year, the Compensation Committee, in its discretion, may grant an Incentive Award.

Section 5. Payment

If an Incentive Award becomes payable for the 2006 Incentive Year, the payment of the Incentive Award will be made, less the appropriate payroll deductions, on or before March 15, 2007. All payments are to be made in cash and are not eligible for deferral under this 2006 Plan, but may be deferred under the SIRVA Executive Deferred Compensation Plan, the SIRVA Employee Retirement Savings Plan, the SIRVA, Inc. Omnibus Stock Incentive Plan or any other plan allowing for deferral of compensation maintained by SIRVA or a SIRVA Controlled-Company, subject to the terms and conditions of such plan documents.

In all cases, eligibility to receive an Incentive Award, the amount of any Incentive Award and the portion paid will be determined and approved by the Compensation Committee or its delegate, as appropriate, in its sole discretion.

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Section 6. Taxes

Any Incentive Award that is received by a Participant under the 2006 Plan is taxable as ordinary income in the year of payment and subject to payroll taxes and withholding. SIRVA reserves the right to withhold any federal, state or local, domestic or foreign taxes as required by law or regulation or as SIRVA deems appropriate from any Incentive Payments that it makes to Participants hereunder. FICA tax will be due in the year that the Incentive Award is paid.

Table A ó 2006 Incentive Year Target Performance Levels

 

 

Business Segment ($M)

 

Plan Minimum

 

Plan Target

 

Plan Maximum

 

1

 

Global Relocation

 

$

41.0

 

$

52.0

 

$

60.0

 

2

 

NA Moving Services

 

$

26.0

 

$

31.0

 

$

35.0

 

3

 

EU Moving Services

 

$

(5.0

)

$

1.0

 

$

5.0

 

4

 

AP Moving Services

 

$

4.0

 

$

5.0

 

$

6.0

 

Memo

 

Corporate

 

$

(19.0

)

$

(19.0

)

$

(19.0

)

5

 

SIRVA, Inc.

 

$

50.0

 

$

70.0

 

$

87.0

 

 

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Table B ó 2006 Incentive Year Metrics and Weightings

Applies to: Global Relocation, North American Moving Services, Europe Moving Services, Asia Pacific Moving Services and SIRVA, Inc.

*                    Operating Income for the Business segment metric will be prorated for Corporate based on the four business segments.

Applies to: Accounting personnel.

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