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Exhibit 10.5
MEDTOX SCIENTIFIC, INC.
EXECUTIVE INCENTIVE COMPENSATION PLAN
(Effective January 1, 2007)
Section 1. Purpose
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The purposes of the Executive Incentive
Compensation Plan (the "Plan") are to attract and retain
highly-qualified senior executives by providing appropriate short
and long-term performance-based incentive awards that are
"qualified performance-based compensation" under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code") and the regulations thereunder; and to advance the
interests of MEDTOX Scientific, Inc. (the "Company") by providing
senior officers of the Company with additional incentive to assist
the Company in meeting and exceeding its business goals.
Section 2. Administration
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The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board of Directors
of the Company (the "Board"). The Committee shall be comprised of
not fewer than two members who shall be "outside directors" within
the meaning of Section 162(m) of the Internal Revenue Code, and the
regulations thereunder.
The Committee may, subject to the provisions of
the Plan, establish such rules and regulations or take such action
as it deems necessary or advisable for the proper administration of
the Plan. Each interpretation made or action taken pursuant to the
Plan shall be final and conclusive for all purposes and binding
upon all persons, including, but not limited to, the Company, the
Committee, the Board, the affected Participants (as defined in
Section 3), and their respective successors in interest.
Section 3. Eligibility
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Cash awards ("Awards") for short and long-term
incentive compensation may be made under this Plan to executive
officers and senior executives of the Company and its Subsidiaries
("Participants").
"Subsidiary" shall mean any corporation or other
business organization in which the Company owns, directly or
indirectly, 20% or more of the voting stock, membership interests
or capital during any Performance Period.
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Section 4. Performance Goal
Criteria
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For each calendar year for which the Committee
determines Awards may be made under the Plan (the "Performance
Period"), the Committee shall establish Performance Goals that
apply to both short and long-term incentives, no later than the
latest date permissible under Section 162(m) of the Internal
Revenue Code. Such Performance Goals may be expressed in terms of
one or more financial or other objective goals which may be
Company-wide or otherwise, including on a division basis, regional
basis or on an individual basis. Financial goals may be expressed,
for example, in terms of sales, earnings per share, stock price,
return on equity, net earnings growth, net earnings, related return
ratios, cash flow, earning
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