CONSOLIDATED-TOMOKA LAND CO.
Annual Executive Cash Bonus Plan
The Executive
Cash Bonus Plan for Consolidated-Tomoka Land Co. is designed to
provide incentive compensation for eligible Company officers and
managers, whose participation has been approved by the Compensation
Committee of the Board of Directors. To be eligible for
the bonus, an officer or manager must be employed as a full-time
employee from January 31 through December 31 of the bonus plan year
unless otherwise recommended by the Compensation
Committee and approved by the Board of
Directors. The discretionary award will be based
on the overall profitability of the Company and each
participant’s overall performance in contributing to the
profitability of the Company for that given
year. Bonuses will be paid no later than March 15
following the end of the preceding bonus plan year.
The Annual
Executive Cash Bonus Plan is provided at the discretion of
Consolidated-Tomoka Land Co. and its Board of
Directors. The Company reserves the right to modify, or
terminate the Plan with or without notice.
Prior to 2008,
the Company’s annual cash bonuses have been based on the
Company’s after-tax earnings per share (“EPS”) in
general conformity with the current cash incentive policy attached
as Exhibit A. Annual Company revenues were primarily
generated from third-party land sales.
Net income from
operations, including the sale of property to third parties in any
calendar year, were calculated in conformity with U.S. generally
accepted accounting principles, as reported in the Company’s
Annual Report and accompanying Form 10-K, filed with the SEC. Land
leases, build-to-suit lease projects, and self-development projects
were not part of the calculation.
Beginning in
2008, the Compensation and Stock Option Committee and Board of
Directors determined that it was equally important to
motivate and reward management for achievements in those three
additional areas, which are also a part of the Company’s
adopted business plan. This revision to the current cash bonus plan
is intended to provide an incentive to management to also engage in
land leases, build-to-suit lease projects, and self-development
projects by providing equivalent cash incentives, which would be
realized from third-party land sales and conversion into 1031
income properties.
In order to
provide an annual plan that balances executive performance, the
Company, for purposes of determining eligibility and potential
bonus pool amounts, will now include in the annual executive bonus
criteria a one-time per project equivalency calculation that
represents the after-tax net income, which would have been
recognized on the land portion of any approved land lease,
build-to-suit lease, or self-development project occurring in that
year had the property instead been sold to a third party at market
value. The market value of the unimproved land shall be determined
by using the unimproved land value used in the calculation of the
land lease or in the build-to-suit lease projects, or in the case
of self-development projects the unimproved land value stated in
the Board-approved proforma less any costs to dat
