Bonuses

With the fourth quarter books closed, we are able to set annual bonuses according to target achievement levels. But first, a quick review as to how bonuses are calculated.

For most of you, those on the LPBP (little people bonus plan), your bonus is set at between 1% and 1.25% of your base annual wages, with a target level of 1.05%, which is achieved if the corporation attains 100% of target earnings per share (EPS). The bonus payout is scaled such that a 1% bonus is paid if the firm achieves 90% of its EPS goal, while the 1.25% payout level is paid upon achievement of 200% of the EPS goal.

For management on the IPBP (important people bonus plan), bonuses are set between 15% and 50% of annual wages, with the minimum bonus level achieved at 10% of EPS goal and the maximum bonus paid at 105% of EPS goal.

What this all means is that, because of the difficult year SBV has experienced, LPBP participants will receive 1% bonus if they were born on a Monday, Wednesday, or Saturday (and can substantiate that fact by producing a birth certificate and an original Word-A-Day calendar from the year of their birth). Likewise, IPBP participants will only be receiving a 35% bonus payout, unless they ask for more.

As well, our CEO and Chairman, the founder and majority shareholder of this company, will be receiving a special performance and retention award. While his leadership is, strictly speaking, priceless, the compensation committee of the board of directors determined that $3.5 million is a good number to start with, and so he will be receiving this amount in addition to his regular salary, options package, dividend income and pager allowance. He will, however, be foregoing his participation in the IPBP package.

We hope that your bonus payment, which should be distributed with your second paycheck following the vernal equinox, will be a constant reminder of the value of your contributions to the SBV team.