Attached files
| file | filename |
|---|---|
| 8-K - METROPOLITAN HEALTH NETWORKS INC | v211795_8k.htm |
EXHIBIT
10.1
SUMMARY
OF 2011 BONUS PLAN FOR CERTAIN EXECUTIVE OFFICERS AND KEY MANAGEMENT
EMPLOYEES
On February 7, 2011, upon the
recommendation of the Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) of Metropolitan Health Networks, Inc. (the “Company”),
the Board established the target bonus amounts and the performance criteria
applicable to the Company's 2011 bonus plan for certain executive officers and
key management employees (the “Bonus Plan”).
The Bonus Plan is a
performance-based, cash incentive plan designed to promote the interests of the
Company and its shareholders by providing employees with financial rewards upon
achievement of specified individual and team business objectives, as well as
helping the Company attract and retain key employees.
In addition to other participants,
each of the Company’s Chief Executive Officer, Chief Financial Officer,
President and Chief Operating Officer and General Counsel are eligible to
participate in the Bonus Plan (the “Applicable Executive Officers”) subject to
his employment with the Company as of December 31, 2011.
The Bonus Plan focuses not only on
the Company’s earnings, but also on achievement of other goals and objectives of
the Company. Under the Bonus Plan, the goals and objectives are
framed in the following five pillars: People, Service, Quality,
Finance and Growth. For each Applicable Executive Officer, each goal and
objective is weighted and the cumulative weighting of the goals and objectives
within each pillar are indicated below:
|
Pillar
|
Weighting
Percentage
|
||
|
People
|
5%
|
||
|
Service
|
10%
|
||
|
Quality
|
10%
|
||
|
Finance
|
50%
|
||
|
Growth
|
20%
|
The foregoing percentages add up to a
total of 95%, with the remaining 5% being reserved for the Chief Executive
Officer’s recommendation and the Committee’s consideration.
Pursuant to the Bonus Plan, each goal
and objective is scored on a scale of 1-to-5(with 3 being the target
goal).
The Finance pillar is the pillar with
the highest weighted percentage and the sole performance goal within such pillar
is the Company’s income before income taxes for the year ending December 31,
2011 (“2011 IBIT”).
To score the results for an
Applicable Executive Officer, the points earned for each goal are multiplied by
the weighting percentage for that goal. The resulting numbers are
added together for all of the goals, producing a number between 0 and
5. The bonus earned is then calculated based on the following
scale:
|
Score
|
Percent of Target
Bonus
|
||
|
1
|
0%
|
||
|
2
|
30%
|
||
|
3
|
100%
|
||
|
4
|
150%
|
||
|
5
|
200%
|
For any bonus to be paid to an
Applicable Executive Officer under the Bonus Plan, the Applicable Executive
Officer must score a number higher than a “1” (the “Threshold
Goal”). Provided the Threshold Goal is satisfied, the Executive
Officers shall receive some level of bonus.
Each Executive Officer is entitled to
receive a bonus (the “Target Bonus”) equal to the percentage of their respective
base salary set forth below.
|
Title
|
Percentage of Base Salary at
Target
|
||
|
Chief
Executive Officer
|
70%
|
||
|
Chief
Financial Officer
|
50%
|
||
|
President
and Chief Operating Officer
|
50%
|
||
|
General
Counsel
|
40%
|
Bonus percentages are scaled ratably
between whole digit scores. By way of example, if the Chief Financial
Officer scores a combined 3.18 for all goals, the total percentage of the Target
Bonus would be 100% plus 9% (.18 times 150-100 = 9) or 109%. The
bonus award would be 109% of the Target Bonus, which in the case of the Chief
Financial Officer is 50% of his salary.
Bonuses under the Bonus Plan are
anticipated to be paid once the Company completes the audit of its financial
statements for the fiscal year ending December 31, 2011.