SHORT TERM INCENTIVE PLAN
The Short Term Incentive Plan (“STIP”) is a compensation plan that is designed to motivate participating employees to work as
a team to accomplish the overall profitability goals of the organization, as well as provide incentive to each individual to meet
their business unit, business line and individual objectives.
The STIP has been approved for the calendar year 2006. Management will review the plan annually; it can be modified and/or
canceled at the sole discretion of the Board of Directors.
The STIP will only pay out if Tesco’s corporate earnings exceed $0.60 per share. If this level of net income is not achieved, no
payout will occur to any individual, regardless of performance in other areas such as business unit operating income, business
line gross profit, or achievement of individual objectives.
If Tesco’s net income equals $1.00 per share the STIP will pay out at 100%; assuming all financial and personal goals have been
In order to reward employees for individual performance while assuring a fair return for the Company, the STIP is structured
with three specific areas to measure performance:
All operating and net income amounts for purposes of this plan are denominated in Canadian dollars; however the incentive
payout will be made in the payroll currency of the plan participant.
Adjustments to payout due to unanticipated financial events outside the scope of the approved annual plan will be at the sole
discretion of the Board.
The incentive payout is calculated on base salary as at January 1, 2006.
The following formula applies to persons that are a Business Unit General Manager (BUGM) and the Sr VP Operations:
The following formula applies to persons that are BLVP:
The following formula applies to persons in Corporate:
For specifically identified Level 6 employees, an incremental payment will exist for exception