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Exhibit
10.1
Saks Incorporated 2007
Senior Executive Bonus Plan
The purpose of the 2007
Senior Executive Bonus Plan (the “ Plan
”) is to provide a select group of executive officers with an
annual incentive opportunity that is based on the achievement of
pre-established, objective performance goals described in
Section 4 (“ Performance Goals ”),
to earn additional compensation so as to attract and retain such
executive officers, and to motivate them to enhance the value of
the business of Saks Incorporated (the “
Company ”). The Plan is intended to provide an
annual incentive compensation opportunity that is not subject to
the limitation on deductions for federal income tax purposes
contained in Section 162(m) of the Internal Revenue Code of
1986, as amended (the “ Code ”), and is
to be construed to the extent possible as providing for
remuneration which is “qualified performance-based
compensation” within the meaning of Section 162(m) of
the Code and regulations thereunder (“ Section
162(m) ”). The Plan will govern annual cash bonus
arrangements and certain annual performance-based stock grants
between the Company and its executive officers. The Plan is not
intended to be subject to the Employee Retirement Income Security
Act of 1974, as amended.
| 2. |
Eligibility to Participate. |
(a) The participants in the
Plan (“ Participants ”) for any annual
performance period (an “ Annual Performance
Period ”) shall be those executive officers of the
Company who are selected by the Committee (as defined in
Section 8) to participate in the Plan for such Annual
Performance Period. Such selection shall be made by the Committee
within 90 days following the commencement of each Annual
Performance Period (or within such earlier period as shall be
required under Section 162(m)). No executive officer shall
have any right to participate in the Plan for any Annual
Performance Period unless selected to participate in the Plan by
the Committee.
(b) An executive officer
shall automatically cease to be a Participant, without notice to or
consent of such executive officer, upon the earliest to occur of
the following events: (i) the Participant’s death;
(ii) the Participant’s permanent and total disability;
and (iii) the Participant’s termination of employment
with the Company.
| 3. |
Annual Performance Period. |
Each Annual Performance
Period shall be a fiscal year of the Company, commencing with the
fiscal year beginning February 3, 2008.
| 4. |
Bonus Amounts and Performance Goals. |
Prior to the 90th day
following the start of each Annual Performance Period (or within
such earlier period as shall be required under Section 162(m))
and while the outcome of the Performance Goals is substantially
uncertain, the Committee will establish, in writing, for each
Participant (i) bonus potential amounts, expressed as a
percentage of annual rate of base salary or a number of shares of
Company common stock, payable in accordance with the Plan and
(ii) one or more Performance Goals with respect to such bonus
potential amounts. Each Performance Goal will consist of, and
achievement of each Performance Goal will be measured against, one
or more of the following business criteria: revenue; net or gross
sales; comparable store sales; gross margin; operating profit;
earnings before all or any of interest, taxes, depreciation and/or
amortization or a percentage thereof to revenue; cash flow; working
capital; return on equity, assets, capital or investment; market
share; earnings or book value per share; earnings from continuing
operations; net worth; turnover in inventory; expense control
within budgets; appreciation in the price of the Company’s
common stock; total shareholder return (stock
price appreciation plus any dividends);
new unit growth; and implementation of critical projects or
processes. Where applicable, the Performance Goals may be expressed
in terms of attaining a specified level of the selected criterion
or the attainment of a percentage increase or decrease in the
selected criterion, or may be applied to the performance of the
Company relative to a market index, a group of other companies or a
combination thereof, all as determined by the Committee.
Performance Goals may include a threshold level of performance
below which no award payment will be made and levels of performance
at which specified percentages of the target award will be paid,
and may also include a maximum level of performance above which no
additional award will be paid. Each of the foregoing Performance
Goals will be determined in accordance with generally accepted
accounting principles and will be subject to certification by the
Committee. Unless otherwise determined by the Committee by no later
than the 90th day of the fiscal year, financial performance will be
determined by excluding all items of gain, loss or expense for the
fiscal year determined to be extraordinary or unusual in nature or
infrequent in occurrence or related to the disposal of a segment of
a business or related to a change in accounting principle all as
determined in accordance with standards established by opinion
No. 30 of the Accounting Principles Board (APA Opinion NO.
30). The Performance Goals established by the Committee may be
different with respect to different Annual Performance Periods and
different goals may be applicable to different Participants. The
Committee, at its discretion, may reduce or eliminate the amount of
compensation or economic benefit that is payable upon the
attainment of a performance goal.
(a) Each Participant shall be
eligible to receive the bonus amount (a “ Bonus
Award ”) determined by the Committee in accordance
with Section 4, payable in cash or stock pursuant to
Section 6, if and to the extent, with respect to such bonus
amount, the Performance Goal or the Performance Goals established
for the Participant for the Annual Performance Period are achieved
in accordance with the objective criteria set forth in the specific
Performance Goal. If the Performance Goal does not have an
otherwise established objective method for calculating the
amoun
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