Annual Cash Incentive Plan for Fiscal Year 2011 - Annie's Inc.
Exhibit I
COMPENSATION COMMITTTEE APPROVAL FOR BONUS PLANS FOR FY2011
The Compensation Committee of Annie's Board of Directors has approved the following:
A new Bonus Plan for FY 2011 providing for a bonus pool of approximately $1.3 million if certain Company financial performance goals related to EBIT ($12.5 MM) and Net Sales ($105 MM) are achieved, along with personal performance goals (see Schedule II). At 100% achievement, current employees are eligible for awards aggregating $1.25MM. Higher awards are payable in the event the specified goals are exceeded.
May 25, 2010
| /s/ Brian T. Murphy |
| Brian T. Murphy |
| For and on behalf of Annie's Inc. Compensation Committee |
| CC: | Molly F Ashby |
| Timothy Fallon |
| Stephen L Palmer |
Exhibit II FY2011 Bonus Award Plan
|
Financial Metrics |
YOY | YOY | FY2011 Goal | FY2010 Est | ||||||||||||||||||||||||
| AH | incr. | AN | incr. | Total | Total | AN | ||||||||||||||||||||||
|
Gross Sales |
$ | 105.7 | 16.3 | % | $ | 25.0 | -2.9 | % | $ | 130.6 | ||||||||||||||||||
|
Net Sales |
$ | 84.7 | 14.3 | % | $ | 20.3 | -4.0 | % | $ | 105.0 | $ | 95.2 | $ | 20.9 | ||||||||||||||
|
Net Sales/Gross Sales |
80.4 | % | ||||||||||||||||||||||||||
|
Operating Income |
$ | 12.5 | $ | 7.7 | ||||||||||||||||||||||||
|
Net Income |
$ | 10.4 | ||||||||||||||||||||||||||
All Bonus Awards subject to EBIT of not less than 9 % of Net Sales
Actual Net Sales Achievement is increased by an additional $1 for every $ by which AN Net Sales exceed $20.3MM and decreased by an additional $ for each $ shortfall. No double dip on the AN override for overachievment.
Payout is subject to adjustment at discretion of the Compensation Committee if the Net Sales/Gross Sales Conversion Ratio is less than 79.7%.
Exhibit II FY2011 Bonus Award Plan (continued)
Summary of Plan Payout by Group at 100% achievement and Factor Weights by Group
| Approx Target % Salary |
Planned Salary FY 2011 |
Proposed Bonus Pool FY 2011 |
Factor Weights |
|||||||||||||||||||||||||||||||||
| Net Sales | EBIT | of which:Discretionary | ||||||||||||||||||||||||||||||||||
|
Exec Team |
38.8 | % | $ | 1,075,000 | $ | 417,500 | 40.0 | % | $ | 167,000 | 60.0 | % | $ | 250,500 | 20.0 | % | $ | 83,500 | ||||||||||||||||||
|
Tier II |
22.4 | % | $ | 1,475,776 | $ | 330,994 | 40.0 | % | $ | 132,398 | 60.0 | % | $ | 198,596 | 30.0 | % | $ | 99,298 | ||||||||||||||||||
|
Tier III |
11.3 | % | $ | 789,571 | $ | 89,152 | 40.0 | % | $ | 35,661 | 60.0 | % | $ | 53,491 | 40.0 | % | $ | 35,661 | ||||||||||||||||||
|
Sales |
20.9 | % | $ | 1,606,278 | $ | 336,259 | 50.0 | % | $ | 168,129 | 50.0 | % | $ | 168,129 | 10.0 | % | $ | 33,626 | ||||||||||||||||||
|
Goal Based |
9.0 | % | $ | 1,428,195 | $ | 128,680 | 40.0 | % | $ | 51,472 | 60.0 | % | $ | 77,208 | 40.0 | % | $ | 51,472 | ||||||||||||||||||
| $ | 6,374,820 | $ | 1,302,585 | $ | 554,660 | $ | 747,925 | $ | 303,557 | |||||||||||||||||||||||||||
Exhibit III
Mark Mortimer - Additional Bonus Award Plan FY 2011
| Measurement Period | YTD July 4 months |
YTD Oct 7 months |
Total Potential Bonus |
|||||||||
|
Measure #1 |
||||||||||||
|
Company Net Sales - AOP FY2011 |
$ | 31,013,719 | $ | 57,959,177 | ||||||||
|
Achievement Threshold |
$ | 31,323,719 | $ | 59,697,952 | ||||||||
| 1.0 | % | 3.0 | % | |||||||||
|
Bonus amount |
$ | 5,000 | $ | 15,000 | $ | 20,000 | ||||||
|
Minimum Company Total Sales Conversion Ratio |
81.4 | % | 80.8 | % | ||||||||
| To be eligible, the Total Company Sales Conversion Ratio (Net Sales/Gross Sales) as reflected in the Company's internal financial statements for the relevant measurement period must exceed the Minimum Company Total Sales Conversion Ratio | ||||||||||||
|
Measure #2 |
||||||||||||
|
Grocery Channel Net Sales AOP FY2011 |
$ | 10,859,257 | $ | 20,830,596 | ||||||||
|
Achievement Threshold |
$ | 11,945,183 | $ | 22,913,656 | ||||||||
|
Level of over achievement implied |
10.0 | % | 10.0 | % | ||||||||
|
Bonus amount |
$ | 5,000 | $ | 10,000 | $ | 15,000 | ||||||
|
Minimum Grocery Channel Sales Conversion Ratio |
78.9 | % | 77.6 | % | ||||||||
| To be eligible, the Grocery Channel Sales Conversion Ratio (Net Sales/Gross Sales) as reflected in the Company's internal financial statements for the relevant measurement period must exceed the Minimum Grocery Channel Sales Conversion Ratio | ||||||||||||
|
Total Bonus Potential |
$ | 35,000 | ||||||||||
| Bonus awards are earned only if the achievement threshold is attained or exceeded. No pro-ration below the threshold. | ||||||||||||
| Bonus to be paid within 60 days after the end of the relevant measurement period, subject to continued employment and to approval of the Compensation Committee | ||||||||||||
| Any bonus(es) paid pursuant to this Additional Bonus Plan is (are) in addition to any other bonuses earned under the Company's regular FY2011 Bonus Plan | ||||||||||||
Exhibit IV
Steven Jackson, Larry Waldman - Additional Bonus Award Plan for FY 2011
Target
If actual FY2011 COGS as reported in the Company's audited financial statements including any variances stated therein are less than FY2011 Pro-Forma COGS, the total bonus amount payable under this Additional Bonus Plan will be equal to 10% of such difference.
This bonus amount shall be shared equally between Steven Jackson and Larry Waldman, and shall be paid upon completion of the Company's FY2011 Audited Financial Statements, subject to 1) review and approval of the Compensation Committee of the Board, 2) continued employment of Mr. Jackson and Mr. Waldman on the date of payment and 3) other conditions generally applicable to Company Bonus Awards.
| * | FY2011 Pro Forma COGS are defined as the product of 4/1/2010 standard case cost per item multiplied by actual FY2011 cases per item minus all Budgeted FY2011 Manufacturing Variances** |
|
Standard COGS |
$ | 67,268,093 | Standard Costs at 4/1/2010 AOP Cases per item | |||
| Budgeted FY2011 Manufacturing Variances are as follows: | ||||||
|
Physical Inventory |
($ | 25,000 | ) | Budgeted Shrink/Count Adjustments | ||
|
Freight In |
($ | 750,000 | ) | Inbound Freight on Materials | ||
|
Manufacturing Variances |
($ | 375,000 | ) | Budgeted Negative Variances | ||
|
PPV Quantity |
$ | 1,114,996 | Cost reduction Improvement planned (of which $428 is rollover) | |||
|
Obsolete |
($ | 300,000 | ) | Budgeted inventory write-offs/disposals | ||
|
Standard Cost Adjustment |
$ | 275,000 | Budgeted price increases | |||
|
MFG variance - vendor discounts |
$ | 1,150,000 | Budgeted promotional discounts to be taken for prompt/early payment | |||
|
Total Budgeted FY2011 Manufacturing Variances |
$ | 1,089,996 | Favorable Variance | |||
|
For reference only: |
||||||
|
AOP COGS |
$ | 66,178,097 | ||||
|
Example: |
||||||
|
If Case Mix is unchanged and Actual COGS = |
$ | 65,500,000 | ||||
|
Planned COGS including planned favorable variances |
$ | 66,178,097 | ||||
|
Net savings |
$ | 678,097 | ||||
|
10% of savings |
$ | 67,810 | ||||
|
Share of Pool |
||||||
|
Jackson |
$ | 33,905 | ||||
|
Waldman |
$ | 33,905 | ||||
Any Additional Bonus Awards are in addition to bonuses paid pursuant to the FY2011 Bonus Plan