THE PERKIN-ELMER CORPORATION
DIVISION LONG-TERM INCENTIVE PLAN
1. Purpose of the Plan.
The purpose of the Plan is to motivate and retain key
division employees in order to further the long-term growth
of The Perkin-Elmer Corporation (the "Company"), a New York
corporation, by offering long-term incentives in the form of
"Value Units," the value of which is related to the growth
in financial performance measures of the Company's operating
divisions.
2. Administration of the Plan.
(a) The Plan shall be administrated by the Management
Resources Committee of the Board of Directors of the Company
(the "Committee") in accordance with the terms of the Plan.
(b) Subject to the express provisions of the Plan, the
Committee shall have exclusive power to interpret the Plan;
to establish and review rules and regulations relating to
the Plan; to select the employees to be granted Value Units
(the "Participants"); to determine the number of Value Units
to be granted to each Participant; to determine the terms
and conditions applicable to the grant of Value Units and
the time or times when Value Units will be awarded; and to
make all other determinations with respect to the operation
of the Plan and the grant and terms of Value Units.
Decisions and determinations by the Committee shall be final
and binding upon all persons having an interest in the Plan.
3. Eligibility.
Individual Participants in the Plan shall be selected
from regular full-time employees of the Company's operating
divisions, including, without limitation, the Applied
Biosystems Division and the Analytical Instruments Division
(each a "Division").
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4. Awards of Value Units.
(a) Awards of Value Units under the Plan may be made
by the Committee at any time during the term of the Plan
and, when made in accordance with the terms of the Plan,
shall be credited to an Account to be maintained by the
Company for each Participant. The Account of a Participant
shall be the sole and exclusive record of Value Units
granted to him or her under the Plan for all purposes. The
award of Value Units under the Plan shall not entitle the
recipient to any voting rights, any rights to receive
dividends or distributions, or any other rights of a
shareholder of the Company or any other entity.
(b) An award of Value Units under the Plan shall be
evidenced by a written instrument signed on behalf of the
Company and delivered to the Participant and shall indicate
the number of Value Units awarded and state that any
payments with respect to such Value Units shall remain
subject to all of the terms and conditions of the Plan.
Under no circumstances shall any award of Value Units under
the Plan be effective or binding on the Company unless and
until such written instrument evidencing such award has been
so signed on behalf of the Company and delivered to the
Participant.
(c) Notwithstanding anything to the contrary
contained herein, the maximum number of Value Units that may
be granted with respect to any Division in any Performance
Cycle (as hereinafter defined) shall be 500,000.
5. Vesting and Termination of Value Units.
(a) A Participant's right to obtain payment of the
Unit Amount (as hereinafter defined) of the Value Units
awarded to him or her under the Plan with respect to a
Performance Cycle shall, except as provided in Section 7, 8,
or 9 below, vest as to fifty percent (50%) of such Value
Units on the last day of such Performance Cycle and as to
the remaining fifty percent (50%) of such Value Units on the
first anniversary of the such date.
(b) Except as otherwise provided in the Plan, all
Value Units and all rights of a Participant to receive payment
of the Unit Amount of Value Units shall terminate on the
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earlier of (i) termination of the Participant's
employment, or (ii) such other date as may be specified in
any award agreement entered into between the Participant and
the Company.
6. Valuation of Value Units and Award Pool.
(a) The Committee shall establish one or more
performance cycles, each representing three consecutive
fiscal years over which the Unit Amount of a Value Unit
shall be accrued (each a "Performance Cycle").
(b) For each of the three fiscal years in a
Performance Cycle, the Company shall, as soon as practicable
following receipt of the Company's audited financial
statements for such year, establish a reserve on the books
of the Company for each Division (the "Award Pool") equal
to the sum of:
(i) Ten percent (10%) of the increase in such
Division's EBIT (as hereinafter defined) over the
highest prior fiscal year's EBIT for such Division;
plus
(ii) Five percent (5%) of the increase in such
Division's Operating Cash Flow (as hereinafter defined)
over the highest prior fiscal year's Operating Cash
Flow for such Division.
(c) Notwithstanding the provisions of Section 6(b)
above, for the Performance Cycle beginning on July 1, 1996,
any funding of the Award Pool for a Division shall be based
upon the increase of such Division's EBIT and Operating Cash
Flow over the highest prior fiscal year's EBIT and Operating
Cash Flow for such Division. For fiscal year 1997 only, the
percentage of the increase of a Division's EBIT contributed
to the Award Pool shall be fifteen percent (15%) and the
percentage of the increase in a Division's Operating Cash
Flow contributed to the Award Pool shall be ten percent
(10%).
(d) At the end of each Performance Cycle, the
Committee shall increase or decrease the aggregate amount of
the Award Pool established for each Division based on the
application of a multiplier to such Award Pool. The
multiplier for each Division shall be established by the
Committee at the beginning of the Performance Cycle based upon
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three-year point-to-point compound annual growth rate
in each Division's EBIT and Operating Cash Flow.
(e) The value of each Value Unit awarded with respect
to a Division for a Performance Cycle (the "Unit Amount")
shall be equal to the aggregate amount of such Division's
Award Pool for such Performance Cycle divided by 500,000.
(f) For the purpose of the Plan:
(i) "EBIT" means the earnings of the applicable
Division before interest income (or expense) and income
taxes, including all directly managed Division
operations and a portion of the cost of shared service
activities provided to the Division, and
(ii) "Operating Cash Flow" means the amount of
cash generated or consumed by the applicable Division,
including EBIT, plus those expenses included in EBIT
which did not require a current year outlay of cash
(e.g., depreciation or amortization of assets),
increased/reduced by current year additions to fixed
assets, net changes in assets and liabilities directly
managed or in support of the Division, and a share of
the Company's income tax liability.
The Committee shall make a determination of Division EBIT
and Operating Cash Flow for each Performance Cycle based on
the Company's audited financial statements. The Committee
may revise such definitions at any time and from time to
time in such manner as it determines, in its sole
discretion, to be necessary or appropriate.
(g) The value of each Value Unit awarded under this
Plan shall be determined in good faith by the Committee at
least once annually as soon as practicable following the
receipt of the Company's audited financial statements for
the immediately preceding fiscal year. The Committee's
determination of such value shall be final and binding on
all persons having an interest in the Plan.
7. Payment Terms During Normal Employment.
(a) Payment of the aggregate Unit Amount of vested Value Units
shall, in the discretion of the Committee, be made to Participants
in cash, common stock of the Company (the "Common Stock"),
or a combination thereof within 90 days after the date
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of vesting. Notwithstanding theforegoing, if payment is to
be made in shares of Common Stock, or a combination of such
shares and cash, any such issuance of shares of Common Stock
may be made subject to the condition that the Participant accept
such restrictionson voting rights and transferability of the shares
as the Committee, in its sole discretion, shall determine.
(b) Notwithstanding the provisions of Section 7(a)
above, to the extent otherwise permissible under the terms
of any deferred compensation plan then offered by the
Company, Participants may elect at least six months prior to
the end of a Performance Cycle to defer payment of all or a
portion of the dollar value of the aggregate Unit Amount of
vested Value Units payable with respect to such Performance
Cycle under the terms of such plan.
8. Payment Terms Following Termination of Employment.
(a) In the event that a Participant's employment is
terminated for reasons other than death, total and permanent
disability, or retirement, all non-vested Value Units
awarded to such Participant shall terminate automatically,
and the Participant shall have no right to receive or to
cause the Company to make any payment for or in respect of
such Value Units; provided, however, that in the event that
a Participant's employment is so terminated after the end of
a Performance Cycle but prior to the payment of the Unit
Amount of any vested Value Units awarded to such Participant
with respect to such Performance Cycle, such Participant
shall be entitled to receive payment with respect to fifty
percent of such Value Units within 90 days after the end of
the Performance Cycle, and such Participant shall thereafter
have no right to receive or to cause the Company to make any
payment for or in respect of such Value Units or any
remaining Value Units.
(b) In the event that a Participant's employment is
terminated for reasons of death, total and permanent
disability, or retirement, such Participant shall be
entitled to receive payment in respect of all Value Units
that were held by such Participant immediately prior to the
date of such Participant's death, total and permanent
disability, or retirement. Such payment shall be made in a
single lump sum payment within 90 days after the end of the
Performance Cycle without regard to the vesting provisions
of Section 7 hereof.
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9. Payment Terms Following a Change in Control.
Notwithstanding any other provision of the Plan, all
Value Units awarded with respect to a Division shall
immediately vest in full in the event (a) of the sale or
other disposition by the Company of all or substantially all
of the assets of such Division, other than a sale or other
disposition to an affiliate (as defined under Rule 144 of
the Securities Act of 1933, as the same may be amended from
time to time) of the Company, (b) that a tender offer or
exchange offer (other than an offer by the Company) for the
Common Stock is made by any "person" within the meaning of
Section 14(d) of the Securities Exchange Act of 1934, as the
same may be amended from time to time (the "Act"), and not
withdrawn within ten (10) days after the commencement
thereof; provided, however, that the Committee may by action
taken prior to the end of such ten (10) day period extend
such ten (10) day period for up to a period of ninety (90)
days after the commencement of such tender offer or exchange
offer; and, provided further, that the Committee may by
further action taken prior to the end of such extended
period declare all Value Units vested in full, or (c) of a
Control Event with respect to the Company. For purposes of
the Plan, a "Control Event" means an event that would be
required to be reported (assuming such event has not been
"previously reported") in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the effective
date of the Plan, pursuant to Section 13 or 15(d) of the
Act; provided, however, that, without limitation, such a
Control Event shall be deemed to have occurred at such time
as (i) any "person" within the meaning of Section 14(d) of
the Act becomes the "beneficial owner" as defined in Rule
13d-3 thereunder, directly or indirectly, of more than 25%
of the Common Stock, (ii) during any two-year period,
individuals who constitute the Board of Directors of the
Company (the "Incumbent Board") as of the beginning of the
period cease for any reason to constitute at least a
majority thereof, provided that any person becoming a
director during such period whose election or nomination for
election by the Company's shareholders was approved by a
vote of at least three-quarters of the Incumbent Board
(either by a specific vote or by approval of the proxy
statement of the Company in which such person is named
as a nominee for director without objection to
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such nomination) shall be, for purposes of this clause (ii),
considered as though such person were a member of the Incumbent
Board, or(iii) the approval by the Company's shareholders of the
sale of all or substantially all of the stock or assets of the
Company (each of the events specified in clauses (a), (b),
or (c) above being herein referred to as a "Change in
Control").
The Unit Amount of each Value Unit vested in accordance
with this Section 9 shall be paid to Participants as soon as
practicable following the date of the Change in Control
based upon the applicable Award Pool as of the date of the
Change in Control as if such date were the last day of the
Performance Cycle and the multiplier to be applied pursuant
to Section 6(d) hereof shall be based on the point-to-point
compound annual growth rate in the applicable Division's
EBIT and Operating Cash Flow through the most recently
completed fiscal year. The Committee may adopt such
procedures as may be necessary to effectuate the
acceleration of the vesting of the Value Units as described
above.
10. Miscellaneous.
(a) The Company shall have the right to deduct from
all payments under the Plan any taxes required by law to be
withheld with respect to such payments.
(b) The Plan is intended and at all times shall be an
unfunded and unsecured deferred compensation plan that is
limited to key management employees of the Company. Any
payments made under the Plan shall be paid from the general
funds of the Company, and no provision shall at any time be
made with respect to segregating assets of the Company for
such payment hereunder. No Participant or other person
shall have any interest in any particular assets of the
Company by reason of a right to receive any payment or
benefit under the Plan, and any such Participant or other
person shall have only the rights of a general unsecured
creditor of the Company with respect to any rights under the
Plan.
(c) Notwithstanding anything to the contrary contained
in the Plan or otherwise, the Company shall not be obligated to pay
the Unit Amount of any Value Unit to the extent that the aggregate
amount payable would cause the Company to violate any law or
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violate or breach any term of any loan,
credit, or any other material agreement of the Company or to
which it or any of its assets are bound or subject. If any
payments are precluded from being made by reason of the
first sentence of this Section 10(c), such payments
otherwise due shall be made on a pro rata basis as and to
the extent such applicable laws or agreements shall permit.
11. Payments at Discretion of Committee.
The Committee may, in its discretion, vest all or a
portion of a Participant's Value Units and permit the
payment of the aggregate Unit Amount of such Value Units to
Participants under circumstances other than those set forth
in Sections 7, 8, or 9 above.
12. Non-Transferability/Certain Limitations.
(a) A Participant's rights and interests under the
Plan may not be assigned, pledged, hypothecated, or
otherwise transferred, either voluntarily or by operation of
law, and shall not be subject to execution, attachment or
similar process. In the case of a Participant's death,
payment of the aggregate Unit Amount of vested Value Units
of such Participant due under the Plan shall be made to his
or her designated beneficiary, or in the absence of such
designation, in accordance with the laws of descent and
distribution.
(b) No employee or other person shall have any claim
or right to be granted an award under the Plan. Neither the
Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ
of the Company or any division thereof.
13. Amendment and Termination.
The Committee may at any time terminate the Plan, or
amend any terms hereof with respect to awards not
theretofore granted, provided that no such action shall
adversely affect in any material manner any right or
obligation with respect to any award theretofore granted
without the consent of the recipient thereof.
14. Effective Date and Termination of the Plan.
The Plan shall be effective as of July 1, 1996, and
shall remain in effect until terminated by the Committee.
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