Specific Program for 2018
. The Compensation Committee established a
2018 target bonus opportunity expressed as a percentage of base salary as follows: Mr. Moroney 85%; and Mr. Moise 80%. In 2018, the Compensation Committee approved Mr. Storers employment agreement, and set the
target annual cash incentive bonus for Mr. Storer at $300,000. Mr. Decherd opted not to be eligible for a 2018 cash incentive bonus.
Mr. Moroney and Mr. Moise were each eligible to receive an annual cash incentive bonus based 50% on financial performance objectives and 50% on individual objectives. In order to calculate
achievement of financial performance under the ICP with respect to 2018 incentive bonuses for Mr. Moroney and Mr. Moise, the Compensation Committee selected Publishing EBITDA, Marketing Services EBITDA, consolidated Company EBITDA,
Publishing revenue, and Marketing Services revenue as the financial performance measures, and individual objectives, both financial and
non-financial,
as performance measures. Payouts of any bonuses to
Mr. Moroney and Mr. Moise under the annual cash incentive program required the Companys overall achievement threshold of at least 70% of target consolidated EBITDA. For Mr. Moroney and Mr. Moise, the weighting given to the
financial performance measures was 20% against consolidated Company EBITDA, 20% against Publishing EBITDA, 20% against Marketing Services EBITDA, 20% against Publishing revenue, and 20% against Marketing Services revenue. For Mr. Storer,
pursuant to his employment agreement, the Compensation Committee set DMV Portfolio Adjusted EBITDA and Total Contract Value Revenue (TCV Revenue) as the financial performance measures.
For the consolidated Company, Publishing, and Marketing Services EBITDA and Marketing Services revenue financial performance metrics, the
threshold, target and maximum performance ranges were 85%, 100%, and 115%, respectively, and the threshold, target and maximum bonus payout ranges were 10%, 100%, and 200% respectively. Threshold, target and maximum performance and payout ranges for
the Publishing revenue component was 95%, 100%, and 105%, respectively, for performance and 10%, 100%, and 200%, respectively, for payout. For financial performance metrics for Mr. Storer, the weighting was 50% against DMV Portfolio Adjusted
EBITDA results and 50% against TCV Revenue. The threshold, target and maximum performance ranges were 85%, 100%, and 200%, respectively, and the threshold, target and maximum bonus payout ranges were 50%, 100% and 200%, respectively, for DMV
Portfolio Adjusted EBITDA and TCV Revenue.
The Company believes that linking
one-half
of the bonus opportunity directly to financial performance, with an opportunity to earn a greater payout than target bonus amount if maximum financial performance is achieved, provides participants with significant motivation to achieve the
Companys financial objectives.
Individual objectives for Mr. Moroney and Mr. Moise were comprised of
performance metrics based on a point system allocated to each objective which included threshold, target and maximum performance and payout ranges for each objective of 50%, 100%, and 150%, respectively, with payments
pro-rated
for performance achievement between the three points. The Company believes that, given the transitional state of the newspaper industry and the unpredictability of core advertising revenues, which
directly affect EBITDA and revenue, it is important to link
one-half
of the bonus opportunity to individual objectives that the NEOs can directly influence, and which have a positive qualitative and
quantitative impact on the Company and increase retention. In 2018, individual objectives were not established for Mr. Storer, as his annual cash incentive bonus was weighted 100% on financial performance metrics.
Financial Performance Goals and Results for 2018
. The tables below show the financial performance
goals for 2018 for each of the corresponding performance levels (threshold, target and maximum) and our actual financial performance results for 2018. Actual EBITDA results shown in the table below include adjustments for items that are excluded for
purposes of bonus calculation, as managements ability to control or influence such items is limited. The adjustments include variances above or below the levels set in the 2018 financial plan approved by
the Board of Directors for
share-based compensation expense, newsprint pricing, pension expense, workers
compensation expense, severance costs, transaction costs, bonus expense, and certain board-approved costs associated with the reincorporation merger, the sale
of the former company headquarters, the CEO transition, certain consulting expenses, and transaction due diligence expense, as well as self-insured medical expense above or below actuarial projections and other miscellaneous
one-time
items.
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