- Current report filing (8-K)
May 20 2009 - 10:01AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
May 19, 2009
MORNINGSTAR,
INC.
(Exact name of
registrant as specified in its charter)
Illinois
(State or other
jurisdiction
of
incorporation)
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000-51280
(Commission
File Number)
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36-3297908
(I.R.S. Employer
Identification
No.)
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22 West
Washington Street
Chicago,
Illinois
(Address of
principal executive offices)
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60602
(Zip Code)
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(312)
696-6000
(Registrants
telephone number, including area code)
N/A
(Former name or
former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers
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On
May 19, 2009, Morningstar, Inc.s (Morningstar) shareholders approved
the Morningstar, Inc. Incentive Plan (the Incentive Plan). The Incentive
Plan is a cash-based incentive program that rewards employees for meeting and
exceeding annual performance goals approved by the Compensation Committee. The
Incentive Plan was established in 2005 and last amended and restated effective January 1,
2009 to comply with Section 162(m) of the Internal Revenue Code (Section 162(m)).
The
material terms of the Incentive Plan are outlined below and should be reviewed
along with the full text of the Incentive Plan, which is attached hereto as Exhibit 10.1.
Eligibility
Only
regular full-time and part-time employees are eligible to participate in the
Incentive Plan. There are approximately 2,375 individuals who are eligible to
participate in the Incentive Plan.
Administration, Amendments, and Termination
The
Incentive Plan is administered by the Compensation Committee. The Incentive
Plan may be amended or terminated by the Board or Compensation Committee.
However, amendments will not be effective without the prior approval of our
shareholders if their approval is necessary to qualify amounts paid under the
Incentive Plan as performance-based compensation under Section 162(m) or
any other applicable law or regulation. No amendment may apply to potential
bonuses with respect to a performance period that began before the effective
date of the amendment.
Performance Goals
Under
the Incentive Plan, participants are eligible to receive annual bonuses based
on achieving certain performance goals for each calendar year. With respect to
executive officers, the Compensation Committee establishes the performance
goals under the Incentive Plan within ninety days after the beginning of each
year, provided that the outcome of the performance goals must be substantially
uncertain at the time they are established. Performance goals for executive
officers are stated as specific amounts of, or specific changes in, one or more
financial measures determined by the Compensation Committee. Performance goals
may also include operational goals such as: productivity, safety, other
strategic objectives, and individual performance. The performance goals need
not be the same for different performance periods and for any performance
period may be stated: (a) as goals for the company, for one or more
subsidiaries, business units, divisions, organizational units, or for any
combination of the foregoing; (b) on an absolute basis or relative to the
performance of other companies or of a specified index or indexes, or be based
on any combination of the foregoing; and (c) separately for one or more
participants or business units, or in any combination of the two.
The
Compensation Committee must use any one or more of the following financial
measures to establish performance goals for executive officers: earnings before
interest and taxes; earnings before interest, taxes, depreciation, and
amortization; net earnings; operating earnings or income; earnings growth; net
income (absolute or compared with growth rates); net income per share; cash
flow, including operating cash flow, free cash flow, discounted cash flow
return on investment, and cash flow in excess of cost of capital; earnings per
share; return on shareholders equity (absolute or compared with a peer group);
stock price (absolute or compared with a peer group); absolute and/or relative
return on common shareholders equity; absolute and/or relative return on
capital; absolute and/or relative return on assets; economic value added
(income in excess of cost of capital); customer satisfaction; expense
reduction; ratio of operating expense to operating revenue; gross revenue or
revenue by pre-defined business segment (absolute or compared with growth rates
for competitors); revenue backlog; margins realized on delivered services; total
shareholder return; debt-to-capital ratio; or market share.
2
The
Compensation Committee may specify any reasonable definition of the financial
measures it uses. The definitions may provide for reasonable adjustments and
may include or exclude items, including but not limited to: realized investment
gains and losses; extraordinary, unusual, or non-recurring items; gains or
losses on the sale of assets; changes in accounting principles or the
application thereof; currency fluctuations, acquisitions, divestitures, or
necessary financing activities; recapitalizations, including stock splits and
dividends; expenses for restructuring or productivity initiatives; and other
non-operating items.
At
the time the Compensation Committee establishes the performance goals, it also
establishes a formula or standard for calculating the amount of the bonus
payable to each executive officer. The bonus of a covered employee
(generally, the chief executive officer and the three most highly compensated
officers, other than the chief financial officer) may be decreased, but not
increased, in the Compensation Committees discretion. In no event can a bonus
payable to a covered employee for any year exceed $5.0 million.
Bonus Determination
Within
a reasonable time after the end of each year, the Compensation Committee
determines, and with respect to covered employees certifies in writing, whether
the performance goals established for the year have been met and the extent to
which the performance goals may have been exceeded, if applicable. If the
Compensation Committee determines, and with respect to covered employees
certifies in writing, the performance goals established for the previous year
have been satisfied, the Compensation Committee determines the amount of the
bonuses payable by the company.
Payment of Bonus
The
company determines bonus payments, which are made in cash, as soon as
practicable after the Compensation Committee determines the bonus amount. Bonus
amounts may be expressed as individual bonuses or as one or more bonus pools,
all or a portion of which may be allocated as individual bonuses to individuals
employed in one or more business units. Except for participants on a leave of
absence of less than three months, participants must be continuously employed
by the company for the entire performance period to receive a bonus. If a
participant is on a leave of absence for three months or longer, the
Compensation Committee will determine whether the leave of absence constitutes a
break in continuous employment. Further, if a participant is on a leave of
absence on the last day of the performance period, the Compensation Committee
may require that the participant return to active employment with the company
at the end of the leave of absence as a condition to receiving the bonus
payment. The Compensation Committee has the discretion to award pro-rata
bonuses for participants who are not employed for an entire year.
Deferral of Bonus
Subject
to the Compensation Committees approval, participants may elect to defer
payment of a bonus by making a deferral election in accordance with applicable
law. The Compensation Committee does not allow participants to defer payment of
a bonus at this time.
Item 9.01. Financial
Statements and Exhibits.
Include
the following information:
(d) Exhibits:
Exhibit No.
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Description
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10.1
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Morningstar, Inc.
Incentive Plan, as amended and restated effective January 1, 2009.
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3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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MORNINGSTAR,
INC.
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Date:
May 20
, 2009
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By:
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/s/
Richard E. Robbins
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Name:
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Richard
E. Robbins
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Title:
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General
Counsel and Corporate Secretary
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4
EXHIBIT INDEX
Exhibit No.
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Description
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10.1
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Morningstar, Inc.
Incentive Plan, as amended and restated effective January 1, 2009.
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5
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