Common use of Performance Based Incentive Compensation Clause in Contracts

Performance Based Incentive Compensation. 5.1 In addition to the Base Salary, and subject to Sections 5.6 and 5.7 hereof, the Executive shall be entitled to receive, for each year during the Term, commencing with the year ending December 31, 2009, performance-based profit incentive compensation (the “Profit Bonus”) as follows: 5.1.1 An amount equal to three and three-quarters (3.75%) percent of the Operating Profits (as defined herein) of the LCI Entities and the Operating Profits of the Kinro Entities combined (the “Combined Profits”) in excess of $35,000,000 and up to $50,000,000; plus 5.1.2 An amount equal to four and one-quarter (4.25%) percent of the Combined Profits in excess of $50,000,000 and up to $65,000,000; plus 5.1.3 An amount equal to five (5%) percent of the Combined Profits in excess of $65,000,000; plus 5.2 Performance-based industry-comparable incentive compensation (the “Industry Bonus”) consisting of the following: There will be added to, or subtracted from, the Profit Bonus the amount of $20,000 for each one (1%) percent that the percentage increase or decrease in the Combined Profits for any year during the Term, as compared to the immediately preceding calendar year, exceeds or is less than two and one-half times (2.5x) the Index of Number of Industry Units Sold (as defined herein) during such year; provided, however, that (i) for purposes of calculating the Industry Bonus, the Combined Profits shall be determined without giving effect to any charge for impairment of goodwill or other intangibles or the 2008 executive retirement charge, and (ii) the Industry Bonus for any year during the Term shall not exceed one and one-half (1.5%) percent of the Combined Profits. 5.3 With respect to the Profit Bonus and the Industry Bonus, if any, of the LCI Entities or the Kinro Entities shall acquire additional business operations, or dispose of existing business operations, the performance goals pursuant to which the Profit Bonus and the Industry Bonus are paid will be modified, consistent with the Corporation’s past practices, to give effect to such acquisition or disposition; plus 5.4 Subject to Section 5.6 hereof, performance-based return on assets (“ROA”) incentive compensation (the “ROA Bonus”) consisting of the following: For each year during the Term that the LCI Entities and the Kinro Entities achieve the combined Return on Assets (as defined herein) indicated, the Executive will receive the following amounts: 5.4.1 For 2009, if the ROA is at least 20%, the Executive will receive $125,000, which amount will increase at the pro-rata rate of $30,000 per one (1%) percent increase in the ROA in excess of 20%; and 5.4.2 For 2010, if the ROA is at least 21%, the Executive will receive $155,000, which amount will increase at the pro-rata rate of $30,000 per one (1%) percent increase in the ROA in excess of 21%; and 5.4.3 For 2011, if the ROA is at least 22%, the Executive will receive $185,000, which amount will increase at the pro-rata rate of $30,000 per one (1%) percent increase in the ROA in excess of 22%; 5.5 For purposes of this Agreement: 5.5.1 The term “Operating Profits” of the LCI Entities and the Kinro Entities means the consolidated income of the LCI Entities and the Kinro Entities calculated before (i) interest expense, (ii) interest or dividend income, (iii) intercompany administrative fees charged by Drew to any of the LCI Entities or the Kinro Entities, (iv) taxes based upon income, (v) extraordinary items determined in accordance with generally accepted accounting principles, (vii) the cumulative effect of a change in accounting principles, and (vii) expenses related to litigation involving products manufactured by the Kinro Composites division of Kinro.

Performance Based Incentive Compensation. 5.1 In addition to the Base Salary, and subject to Sections 5.6 and 5.7 hereof, the Executive shall be entitled to receive, for each year during the Term, commencing with the year ending December 31, 2009, performance-based profit incentive compensation (the “Profit Bonus”) as follows: 5.1.1 An amount equal to three two and threeone-quarters quarter (3.752.25%) percent of the Operating Profits (as defined herein) of the LCI Entities and the Operating Profits of the Kinro Entities combined (the “Combined Profits”) in excess of $35,000,000 and up to $50,000,000; plus 5.1.2 An amount equal to four two and one-quarter fifty five hundredths (4.252.55%) percent of the Combined Profits in excess of $50,000,000 and up to $65,000,000; plus 5.1.3 An amount equal to five three (53%) percent of the Combined Profits in excess of $65,000,000; plus 5.2 Performance-based industry-comparable incentive compensation (the “Industry Bonus”) consisting of the following: There will be added to, or subtracted from, the Profit Bonus the amount of $20,000 12,000 for each one (1%) percent that the percentage increase or decrease in the Combined Profits for any year during the Term, as compared to the immediately preceding calendar year, exceeds or is less than two and one-half times (2.5x) the Index of Number of Industry Units Sold (as defined herein) during such year; provided, however, that (i) for purposes of calculating the Industry Bonus, the Combined Profits shall be determined without giving effect to any charge for impairment of goodwill or other intangibles or to the 2008 executive retirement charge, and (ii) the Industry Bonus for any year during the Term shall not exceed one and onenine-half tenths (1.50.9%) percent of the Combined Profits. 5.3 With respect to the Profit Bonus and the Industry Bonus, if any, of the LCI Entities or the Kinro Entities shall acquire additional business operations, or dispose of existing business operations, the performance goals pursuant to which the Profit Bonus and the Industry Bonus are paid will be modified, consistent with the Corporation’s Corporations’ past practices, to give effect to such acquisition or disposition; plus 5.4 Subject to Section 5.6 hereof, performance-based return on assets (“ROA”) incentive compensation (the “ROA Bonus”) consisting of the following: For each year during the Term that the LCI Entities and the Kinro Entities achieve the combined Return on Assets (as defined herein) indicated, the Executive will receive the following amounts: 5.4.1 For 2009, if the ROA is at least 20%, the Executive will receive $125,00075,000, which amount will increase at the pro-rata rate of $30,000 18,000 per one (1%) percent increase in the ROA in excess of 20%; and 5.4.2 For 2010, if the ROA is at least 21%, the Executive will receive $155,00093,000, which amount will increase at the pro-rata rate of $30,000 18,000 per one (1%) percent increase in the ROA in excess of 21%; and 5.4.3 For 2011, if the ROA is at least 22%, the Executive will receive $185,000111,000, which amount will increase at the pro-rata rate of $30,000 18,000 per one (1%) percent increase in the ROA in excess of 22%; 5.5 For purposes of this Agreement: 5.5.1 The term “Operating Profits” of the LCI Entities and the Kinro Entities means the consolidated income of the LCI Entities and the Kinro Entities calculated before (i) interest expense, (ii) interest or dividend income, (iii) intercompany administrative fees charged by Drew to any of the LCI Entities or the Kinro Entities, (iv) taxes based upon income, (v) extraordinary items determined in accordance with generally accepted accounting principles, (vii) the cumulative effect of a change in accounting principles, and (vii) expenses related to litigation pending the date hereof involving products manufactured by the Kinro Composites division of Kinro.