Maxim CaseFall2010 - Maxim Case Mary Martin has served both...

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Maxim Case Mary Martin has served both as an outside director to Maxim Manufacturing since 1998 and as a member of the Company’s compensation committee since 2000. Mary has been reviewing Maxim’s 2009 preliminary earnings statement (Exhibit 1) in preparation for the meeting of the Compensation Committee. She is uneasy about the company’s computation of “operating profits” for 2009, particularly since management bonuses at Maxim are based on achieving specific operating profit goals. Maxim’s senior management participate in an incentive bonus plan that was adopted in 2004. The formula has been approved by the Board of Directors. The bonus is determined as follows: Bonus as a percentage of salary: Operating profits 0% Below $ 4m 100% At least $ 4m 200% At least $ 6m 300% At least $ 8m The compensation committee can award a lesser amount than that indicated by the plan formula if circumstances warrant, however, no bonus reductions have occurred since adopted. Required:
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This note was uploaded on 12/05/2011 for the course SCI BIO223 taught by Professor Stalk during the Spring '11 term at University of Toronto.

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Maxim CaseFall2010 - Maxim Case Mary Martin has served both...

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