Exhibit 10-d
ADC
Telecommunications, Inc.
Management Incentive Plan Document
Fiscal Year 2008
MANAGEMENT INCENTIVE PLAN DOCUMENT
Fiscal Year 2008
Plan Name and Effective Date
The name
of this Plan is the ADC Telecommunications, Inc. Management
Incentive Plan. The plan is effective from November 1, 2007
through October 31, 2008.
Purpose
The
purpose of the Plan is to provide, with full regard to the
protection of shareholder’s investments, a direct financial
incentive for eligible managers to make a significant contribution
to ADC’s established annual goals.
Eligibility
Eligibility for Fiscal Year 2008 is limited to full or part-time
regular employees in the U.S. and in such other countries where ADC
has specifically notified employees of eligibility for
participation in the Plan. Eligibility for participation in this
Plan is limited to such employees who hold executive officer and
certain management positions reporting to the Chief Executive
Officer. The CEO does not participate in the Plan. In order to be
eligible, an employee cannot participate in any other ADC incentive
plan, except as approved by the Compensation Committee of the Board
of Directors, and must be employed in an eligible position on or
before October 1, 2008.
Timing of Payment
Payments
that become due under this Plan are made as soon as
administratively feasible following the close of ADC’s fiscal
year, but within seventy-five days of that event, generally in late
December or early January. All payments are subject to appropriate
withholdings.
Plan Goals
The Plan
reinforces the key goals that support ADC’s long-term
strategic plans. The key factors in ADC’s FY08 corporate
success are Pro Forma Operating Income and Net Sales. These factors
are the same for ADC’s operating units: Global Connectivity
Solutions, Active Infrastructure, and APS. Accounting methodology
changes may dictate corresponding goal modifications during the
plan year. Additionally, beginning with FY2008, each participant
will be eligible for a portion of his/her MIP based upon individual
contribution.
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Following is a description of the Plan’s financial
components:
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Plan Goal |
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Definition |
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Pro Forma Operating Income |
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Net Sales less all
relevant expenses incurred to produce the products or deliver
services. Expenses include direct material and labor costs as well
as regional and Business Unit costs, including engineering, sales
& marketing expenses, and corporate overhead costs. Pro Forma
Operating Income does not include interest income, interest
expense, income tax or other non-operating income. It also excludes
restructuring and other one-time expenses that are not reflective
of the ongoing business.
Corporate overhead costs not directly attributable to the Business
Unit are assessed as a shared service charge set at a fixed
percentage of Revenue. ADC-level Pro Forma Operating Income will
reflect absorption of ALL corporate expenses including variances
above or below the level of the shared service charge.
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Net Sales / Revenue |
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The amount ADC can
recognize in accordance with Generally Accepted Accounting
Principles (GAAP) for goods shipped or services provided to
third party customers, net of returns received and discounts.
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NOTE:
For the Business Units, Net Sales, and Pro-Forma Operating Income
are measured on Plan foreign exchange rates.
Goal Weightings
Executives participating in the Plan will have the following
business/corporate weightings:
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75% of Total Award |
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Business |
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OI Metric |
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Net Sales |
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Weight |
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Metric |
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BU
Leader
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50% BU |
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50 |
% |
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25 |
% |
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50% ADC |
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50 |
% |
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25 |
% |
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Corporate
Function Leader
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100% ADC |
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50 |
% |
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25 |
% |
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For
purposes of this Plan, Global Connectivity Solutions, Active
Infrastructure and APS will be treated as separate Business
Units.
Individual Performance
Beginning with the FY08 fiscal year, each participant will have
twenty-five percent (25%) of their target MIP award tied to one
(1) to three (3) individual goals mutually agreed upon by
the participant and the CEO. Achievement of the agreed-upon goals
yields a 100% award payout. An additional overachievement award may
be made as recommended by the CEO at his sole discretion to the
Compensation Committee. The maximum individual performance award is
50% of the participant’s total target MIP award.
Modifications may be made to individual goals before
September 1, 2008. Documentation must occur for any changes
made to an existing plan and approval of the CEO, Chief Financial
Officer and Vice President, Human Resources must occur.
Undocumented modifications of individual plans will not be honored
for award payment.
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Performance Gates
To
ensure protection of shareholder interest, no payment will be
provided as the result of any ADC-wide financial performance factor
unless ADC achieves its threshold Pro-Forma Operating Income for
the year. Similarly, no payment will be provided as the result of
any Business Unit financial performance factor unless the Business
Unit achieves its threshold Pro-Forma Operating Income.
Calculation of Payment
Prior to
making any payment under this Plan, the Board of Directors mu
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