EXECUTIVE BONUS PLAN B
Published on March 11, 2005
EXHIBIT 10(h)
STANDARD FORM A OF
EXECUTIVE BONUS PLAN
[Rollins logo] Executive Offices
PERSONAL & CONFIDENTIAL
TO: [NAME OF RECIPIENT] FROM: Gary W. Rollins
DATE: [DATE] OFFICE: [TITLE OF RECIPIENT]
SUBJECT: [CURRENT YEAR] EXECUTIVE BONUS PLAN
COPIES: file
I am pleased to enclose your [PREVIOUS YEAR] Executive Bonus check and
worksheet.
Additionally, the Rollins, Inc. Board of Directors Compensation Committee has
approved your participation in a [CURRENT YEAR] Executive Bonus Plan program and
the details of your bonus opportunity are enclosed.
This plan is designed to support shareholder interests by rewarding you for
Rollins Inc.'s achievements in the areas of Profit Improvements, Profit to Plan,
and Combined Revenues to Plan.
You will also participate in a Home Office bonus plan for the balance of your
[CURRENT YEAR] bonus opportunity, which will be based on achievements in
department customer service and your cumulative department performance to the
[CURRENT YEAR] Home Office department budgets.
Attached are two copies of your [CURRENT YEAR] Executive Bonus Plan. Please keep
one copy for your records and return one signed copy to Human Resources for
company record keeping purposes. Also attached is a copy of the Agreement to
Arbitrate, which, according to our Company Dispute Resolution Policy, is a
required document of every bonus-eligible employee. Please return a signed copy
of the
Agreement to Arbitrate with your signed bonus plan. You are required to sign it
only once.
With your assistance we expect [CURRENT YEAR] to be a continuation of our profit
and revenue successes that we've established over recent years. Your individual
efforts will be key to the success of the Company for our employees and
shareholders.
[TITLE OF RECIPIENT]
Incentive Compensation Plan - [PLAN YEAR]
FOR: [NAME OF RECIPIENT]
The elements of the plan are as follows:
1. PROFIT TO PLAN
The Profit to Plan element will be paid according to the following scale up to a
maximum of 15% of your annual salary:
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Rollins Inc. Pre-Tax Profit to Annual % of Salary
Plan Achievement
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100% 15%
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97.5% 12.5%
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95% 10.0%
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92.5% 7.5%
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90% 5%
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The Company must have a profit and a profit improvement for this element to be
paid.
Your CY [YEAR] Pre-Tax Profit Plan is: $[TARGET AMOUNT]
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Annual [YEAR]
2. PROFIT INCREASE OVER LAST YEAR
You will be paid [.22% for Senior VP and Secretary, .20% for Chief Financial
Officer and Treasurer] of the profit increase up to the maximum of 10% of your
annual salary.
The Company must have a profit and a profit improvement for this element to be
paid.
Your CY[LAST YEAR] Pre-Tax Adjusted Profit base was: $
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Annual `0__
3. COMBINED REVENUE TO PLANNED INCREASE
The Revenue to Planned Increase element will be paid according to the following
scale up to a maximum of 5% of your annual salary:
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Rollins Inc. Combined Net Planned Percentage Annual % of Salary
Revenue to Planned Increase over Prior
Increase Achievement Year
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100% _____% 5%
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95 - 99.9% _____% 4%
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- ------------------------------ ------------------------- -----------------------
90 - 94.9% _____% 3%
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85 - 89.9% _____% 2%
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The Company must have a profit and a profit improvement for this element to be
paid.
Your CY0__ Combined Revenue Plan is:
$[plan year target amt.] $__________ [target percentage]
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Annual '0__ Actual '0__ % increase
Glossary of Terms and Conditions
200_ Rollins, Inc. Executive/Home Office Bonus Plan
I. General Plan Qualifiers and Provisions
A. The plan year for this bonus is January 1, 200_ to December 31, 200_.
B. Your bonus plan is subject to change each year.
C. Your bonus will be calculated using your actual current base salary as
of December 31, 200_.
D. Your eligibility for a bonus and the amount due will be determined
solely by the Company.
E. Bonus payments will be made in one lump sum no later than March 15,
200_, minus applicable state and federal taxes. Other deductions may
apply, e.g., 401(K) deductions, etc.
F. You must be employed in the same position on December 31, 200_ to be
eligible for a bonus, except as described below in (H.)
G. You will not receive a bonus if for any reason you are in a position
on December 31, 200_ that is not eligible for a bonus or if you are
not actively employed on the date that the bonus is paid.
H. If you are promoted during the plan year from one bonus-eligible
position to another bonus-eligible position, the bonus components
common to both plans carry over to the new position. Plan components
unique to the original bonus-eligible position will be paid based on
time spent in the position (must be at least 50 percent of the plan
year). Bonus amounts on these unique components will be calculated at
the time of the transfer based on year-to-date results.
I. If you are hired into a bonus-eligible position during the year, or if
you are promoted during the plan year from a position that is
ineligible for a bonus into a bonus-eligible position, you will be
eligible for a pro-rated bonus if you are in the bonus-eligible
position for at least 50 percent of the plan year.
J. You will not receive any bonus if you falsify documents, violate
company policy or know of such actions by employees under your
direction without taking corrective actions.
K. Any disputes over your bonus will be resolved by the Compensation
Committee.
L. The Compensation Committee reserves the right to reward outstanding
performance in unique situations by awarding an employee a bonus
outside the terms of the 200_ Home Office Bonus Plan.
M. The actual profit from which the bonus may be determined may be
subject to adjustments as recommended by the President and approved by
the Compensation Committee for the year 200_.
N. Acquisitions over $5,000,000 in revenue will be added to the
Company strategic plan (revenue and profit) based on a pro forma
of the acquisition model for bonus calculations.
II. Plan Components
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A. General Provisions
The 200_ Executive/Home Office Bonus Plans divide bonus opportunity
into two components: customer satisfaction and key operating
initiatives. No bonus will be paid under any component if Rollins
Inc.'s pre-tax profit does not result in a profit improvement in 200_,
as compared to 2004.
B. Customer Satisfaction Component
1. The 200_ Internal Customer Service Surveys will utilize a format
similar to the ones utilized in 200_.
2. Participants with this component will have this portion of their
bonus opportunity based on the weighted average rating of the
departments who report to them.
3. You will receive 100 percent of the bonus opportunity under this
component if your departments receive a weighted average rating
of ____ or better.
4. You will receive 75 percent of the bonus opportunity under this
component if your departments receive a weighted average rating
of _____.
5. You will receive 50 percent of the bonus opportunity under this
component if your departments receive a weighted average rating
of ______ in the survey.
C. Key Operating Initiatives Component
1. The purpose of this portion of the bonus plan is to recognize
achievement of specific financial and/or strategic goals.
2. Participants with this component will have this portion of their
bonus opportunity based on 100% attainment (or better) of their
combined departments' expenses to plan.
3. You will not receive any bonus for a KOI linked to your
departments' expense to plan if you intentionally understaff your
departments or delay an agreed-upon project.
ACKNOWLEDGMENT
I have received and read a copy of my Incentive Plan with the accompanying
Glossary of Terms and Conditions. I understand that participation in this
Plan should in no way be construed as a contract or promise of employment
and/or compensation. Employment is at-will, and therefore employment and
compensation can terminate, with or without cause and with or without
notice, at any time at the option of the Company or employee. I also
understand that this Incentive Plan will be subject to review, and likely
to change next year.
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Plan Participant Date