Exhibit 10.4
ModusLink Global Solutions,
Inc.
FY 2009 Executive Management
Incentive Plan
The objective of the FY 2009
Executive Management Incentive Plan (“2009 EMIP Plan”
or “Plan”) is to recognize and reward the achievement
of financial, business and management goals that are essential to
the success of ModusLink Global Solutions, Inc. and its
subsidiaries (the “Company” or “ModusLink Global
Solutions”).
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2.
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Period of
Effectiveness
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This Plan relates to the 2009 fiscal
year, August 1, 2008 to July 31, 2009.
Certain executive employees of
ModusLink Global Solutions and its subsidiaries, as determined by
the Human Resources and Compensation Committee of the Board of
Directors of ModusLink Global Solutions (the
“Committee”), are eligible for participation in the
2009 EMIP Plan. (Each such designated person is called a
“Participant” in this Plan.)
The Company will issue all
Participants a notice of their eligibility and their individual
Plan components by providing a document in the form of Appendix B
to each eligible Participant. Other eligibility requirements are
listed in Section 9 below.
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4.
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Target
Payout Percentage
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Participants will be assigned a
target payout percentage for the 2009 EMIP Plan, expressed as a
percentage of Base Salary (as defined herein). This percentage (the
“Target Payout Percentage”) represents the potential
bonus that will be earned at full achievement of goals for all Plan
components at their “target” levels. The Target Payout
Percentage will vary according to the Participant’s position.
Actual payout percentage will vary based on the factors described
in Section 5 below.
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5.
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Plan
Components and Targets
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The Plan payout will be measured
based upon achievement against “NGOI”
(subsidiary-specific and/or consolidated, depending on the
Participant’s role), Sales Revenue and Individual
Performance, each as further described below. A percentage of each
Participant’s Target Payout Percentage will be allocated to
each of the relevant components for that Participant.
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A.
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Non-GAAP
Operating Income (Loss) (“NGOI”)
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Non-GAAP Operating Income (Loss)
(“NGOI”) is defined as operating income (Loss) of
ModusLink Global Solutions, Inc. excluding net charges related to
depreciation, amortization of intangible assets, stock-based
compensation, restructuring and non-cash charges.
CONFIDENTIAL: FOR INTERNAL USE
ONLY
Each Participant’s Target
Payout Percentage will include a component based on Consolidated
NGOI targets. Some Participants will also have a component based on
a subsidiary-specific NGOI target. Each Participant will be
informed of (i) the relevant “Threshold Level” for
Consolidated NGOI, (ii) the “Target Level” for
Consolidated NGOI and, if applicable, for subsidiary-specific NGOI
for the Participant’s company, and (iii) a
“Maximum Level” for Consolidated NGOI.
Each Participant’s Target
Payout Percentage will include a component based on a Sales Revenue
target. For some Participants the Sales Revenue target will be
based on Consolidated Sales Revenue and for some Participants the
Sales Revenue target will be based on Subsidiary-specific Sales
Revenue. Each Participant will be informed of (i) the
“Threshold Level” for the relevant Sales Revenue,
(ii) the “Target Level” for the relevant Sales
Revenue, and (iii) a “Maximum Level” for relevant
Sales Revenue.
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C.
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Individual
Performance
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Each Participant’s Target
Payout Percentage will include a component based on achievement of
individual goals and objectives. In order to be eligible for the
individual performance component, all Participants must have
clearly documented individual goals and objectives established in
conjunction with and approved by the Chief Executive Officer (and
in the case of the Chief Executive Officer, by the Committee).
Achievement of these goals and objectives will be assessed by the
Chief Executive Officer following the close of the fiscal year. In
the event the Company realizes overachievement with regard to
Consolidated NGOI and/or Sales Revenue, the actual payment made
with respect to individual performance will be increased
proportionally to reflect the amount of overachievement paid with
respect to Consolidated NGOI and Sales Revenue (reflecting the
relative weight of each component on the Target Payout
Percentage).
If ModusLink Global Solutions does
not achieve the Threshold Level for Consolidated NGOI, no payments
whatsoever will be made under this Plan, whether for NGOI
achievement (consolidated or regional), Sales Revenue or individual
performance.
No payout will be made without
approval from the Committee.
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7.
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Calculation of Achievement and Overachievement
Adjustments
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Subject in each case to
Section 6 above:
In the event that the Threshold
Level for Consolidated NGOI is achieved, each Participant would be
eligible to receive a portion of the Consolidated NGOI component of
his or her
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CONFIDENTIAL: FOR INTERNAL USE ONLY
Target Payout Percentage based on a
pro rata sliding scale running between 0% to 100% based on the
s
