long-term incentive grants to the Named Executive Officers, the CEO may also take into account tax
implications to the Named Executive Officer and to the Company as well as the expected accounting impact and
dilution effects. The Compensation Committee makes the ultimate determination regarding these grants and can
increase or decrease the recommended awards in its subjective discretion. For fiscal 2011, the Compensation
Committee did not alter the award levels for the Named Executive Officers recommended by the CEO.
appreciation rights are made at a specified strike price set forth in the applicable award agreement, which is
generally the mean of the highest and lowest sales price of our Common Stock on the date of grant of the award
or on the last preceding trading date if no sales are made on the date of grant.
Executive Officers receive is individually calculated using the Named Executive Officer's total cash
compensation multiplied by the percentages recommended by the CEO and approved by the Compensation
Committee. Once the cash value for each grant is calculated, we convert the cash value into a number of stock
appreciation rights using the Black-Scholes value on the date of grant and a number of restricted units using the
fair market value of our Common Stock (as defined in our 2008 Incentive Plan) on the date of grant. Starting in
fiscal 2011, we used a value-based granting system in order to provide our Named Executive Officers with equity
grants that had a set cash value on the date of grant. In general in prior fiscal years, grants made to our Named
Executive Officers were made using a unit-based granting system that resulted in the value of the grants
changing from year-to-year strictly based on the market price of our Common Stock on the date of grant.
review rating of "meets expectations", "exceeds expectations" or "outstanding", respectively. Each of our other
Named Executive Officers were eligible to receive grants of restricted stock units and grants of stock
appreciation rights, each with a cash value equal to 17.5%, 35% or 42.5% of the Named Executive Officer's total
cash compensation for a fiscal 2010 performance review rating of "meets expectations", "exceeds expectations"
or "outstanding", respectively.
equal to 50% of his total cash compensation. Because Mr. Kovar and Ms. Pritchard each received an "exceeds
expectations" fiscal 2010 performance review rating, in March 2011, each received a grant of restricted stock
units and a grant of stock appreciation rights, each with a cash value equal to 35% of his or her total cash
immediate vesting following a "change in control." The events used to define "change in control" under these
agreements were chosen because each reflects a circumstance in which, through a party's acquisition of a
significant voting block, a shift in the control of the majority of the Board of Directors, or a corporate transaction,
a person or group would be expected to obtain control or effective control over our policies and direction. In
those circumstances, the Compensation Committee believes it may be appropriate to provide management the
benefit of the awards that have been conveyed prior to such event and to waive the service and other conditions
applicable to management's rights to such awards, because such change could reasonably be expected to
materially alter our policies and objectives, and/or result in a material change in the composition of management.