Exhibit 10 (l)
CLARK EQUIPMENT COMPANY
INCENTIVE COMPENSATION PLAN
FOR CORPORATE OFFICE MANAGEMENT
(AMENDED AND RESTATED EFFECTIVE 1 JANUARY 1994)
This Plan was adopted the 18th day of February 1992, and on 14 February
1994 was amended and restated by the Human Effectiveness Committee of the
Board of Directors of Clark Equipment Company ("Clark"), effective as of
1 January 1994, as set forth below.
1. Statement of Purpose
1.1 For many years Clark has maintained a program providing an incentive
for executives and managers through a means for them to participate in
the success of the Company. This Plan provides an incentive for such
employees by rewarding performance on the basis of the achievement of
planned income and return on equity, and other goals.
2. Definitions
Unless the context provides a different meaning, whenever used in this
Plan the following terms shall have the following meanings:
2.1 "Actual Net Income" means the Net Income actually achieved by the
Company for the Year.
2.2 "Actual Return on Equity" means the Return on Equity actually achieved
by the Company for the Year.
2.3 "Average Equity" means, for any Year, the average of the stockholders'
equity in the Company for the last five quarterly financial reports of
the Company ending with the report as of December 31 of such Year.
2.4 "Board" means the Board of Directors of Clark Equipment Company.
2.5 "Committee" means the Human Effectiveness Committee of the Board or
such other Committee to which the Board has delegated the
responsibility for administering the Plan.
2.6 "Company" means Clark Equipment Company.
2.7 "Compensation Year" or "Year" means a calendar year for which
incentive compensation is determined pursuant to the Plan, beginning
with the Year 1994.
2.8 "Corporate Office" means the corporate office of the Company.
2.9 "Hay Average Incentive Compensation" or "HAIC" means, with respect to
each Participant, the difference between average total compensation
and average base salary for his salary grade. This HAIC amount shall
be determined for the Year in accordance with the Hay Compensation
Report for Industrial Management at the average salary level of
surveyed companies.
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2.10 "Incentive Compensation" means the incentive amount payable to a
Participant as determined pursuant to Section 3 of the Plan.
2.11 "Net Income" means the reported net earnings of the Company for the
Year.
2.12 "Participant" means an employee in the Corporate Office who (a) is in
salary grade 61 or higher, or (b) is in salary grade 59 or 60, and
whose inclusion in the Plan has been approved by the Chief Executive
Officer of the Company.
2.13 "Plan" means the Clark Equipment Company Incentive Compensation Plan
for Corporate Office Management, as set forth herein.
2.14 "Planned Net Income" means the amount of Net Income contained in the
Company's plan for the Year, as submitted to the Board for the Year.
The determination of Planned Net Income may be revised, for purposes
of this Plan, at the discretion of the Committee, during the Year to
reflect any change in capitalization, or a transaction such as any
acquisition, divestiture, merger, consolidation, separation,
(including a spin-off or other distribution of stock or property), any
reorganization, any partial or complete liquidation, or other major
changes in the business which were not reflected in the plan.
2.15 "Planned Return on Equity" means the percentage Return on Equity
contained in the Company's plan for the Year, as submitted to the
Board for the Year. The determination of Planned Return on Equity may
be revised, for purposes of this Plan, at the discretion of the
Committee, during the Year to reflect any change in capitalization, or
a transaction such as any acquisition, divestiture, merger,
consolidation, separation, (including a spin-off or other distribution
of stock or property), any reorganization, any partial or complete
liquidation, or other major changes in the business which were not
reflected in the plan.
2.16 "Return on Equity" or "ROE" means the Net Income of the Company for
the Year as a percentage of Average Equity for such Year.
3. Incentive Compensation
3.1 The Incentive Compensation for each Participant for each Year will be
a percentage of Hay Average Incentive Compensation for such Year equal
to the sum of the HAIC percentages determined under Sections 3.2, 3.3
and 3.4, subject to the limitations of Sections 3.5 and 3.6.
3.2 (a) The HAIC percentage under this Section is based on the financial
performance of the Company for the Year as determined from the
following matrix of Return on Equity and Net Income:
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Actual Return on Equity
Compared to Planned Return on Equity
No Less
Than +5%
-5% -2.5% +2.5% or More
Points Points Equal Points Points
Actual 120% 60% 65% 70% 75% 80%
Net or more
Income 110% 50% 55% 60% 65% 70%
as a
Per-
centage 100% 40% 45% 50% 55% 60%
of
Planned 90% 30%* 35% 40% 45% 50%
Net at least
Income 80% -- 25%* 30% 35% 40%
Percentages within the box are percentages of HAIC
If Planned Net Income is a loss, then the 110% line shall mean a
10% improvement, etc.
(b) Intermediate values within the above matrix will be determined by
interpolation, except that there will be no interpolation below
the two HAIC percentages marked with an asterisk(*), nor will
there be any Incentive Compensation payable below these HAIC
percentages.
(c) If either Planned Return on Equity or Planned Net Income is less
than an amount equal to six percent Return on Equity, then:
(i) if either Actual Return on Equity or Actual Net Income
is less than an absolute dollar amount equivalent to six percent
Return on Equity, the maximum percentage of HAIC under this
Section is 50%; or
(ii) if both Actual Return on Equity and Actual Net Income
are at least equal to an absolute dollar amount equivalent to six
percent Return on Equity, the actual HAIC percentage shall be
determined from the above matrix except that, for measurement
purposes, Planned Return on Equity shall be deemed to be six
percent and Planned Net Income shall be deemed to be the amount
of Net Income equal to six percent Return on Equity.
3.3 The HAIC percentage under this Section is based on the achievement of
one or more operating goals recommended by the Chief Executive Officer
and approved by the Committee for the Year.
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The percentage of HAIC payable for performance of these goals will be
established each Year by the Committee but, in general, will be stated
as follows:
Percentage of
Performance Percentage
of Goal(s) of HAIC
120% or more 40%
110% 35%
100% 25%
90% 20%
at least 80% 15%
Intermediate values will be determined by interpolation.
3.4 The HAIC percentage under this Section will be determined for each
Participant other than the Chief Executive Officer for the Year by the
Committee on the recommendations of the Chief Executive Officer. Such
percentage for the Chief Executive Officer will be determined by the
Committee. Normally, the incentive compensation awarded under this
Section for good performance will be 25% of HAIC, but may vary from 0
to 50% of HAIC.
3.5 Except to the extent provided in Section 3.6, no Incentive
Compensation will be earned in any Year for which Actual Net Income is
negative.
3.6 At the discretion of the Committee, after a second consecutive Year in
which Actual Net Income is positive following a Year in which Actual
Net Income is negative, an evaluation may be made by the Committee of
performance during the Year of negative Actual Net Income immediately
preceding the first of such Years of positive Actual Net Income.
Performance for such Year shall be measured in the same manner as is
done for a profitable Year as provided in Sections 3.2, 3.3 and 3.4,
except that the HAIC percentage for such Year shall not, in the
aggregate, exceed 50%, and at the discretion of the Committee such
HAIC percentage may be reduced to zero. The resulting percentage of
HAIC, if any, will, at the discretion of the Committee, be paid, in
addition to the amounts earned for performance in such second
consecutive Year in which Actual Net Income is positive, to the
Participants who were Participants in the Plan during the relevant
Year of negative Actual Net Income.
Notwithstanding the preceding paragraph of this Section 3.6, in the
event that the Year 1994 is the second consecutive Year in which
Actual Net Income is positive following one or more Years in which
Actual Net Income is negative, Incentive Compensation will be paid
with respect to such Year(s) of negative Actual Net Income if and to
the extent that it would have been payable under this Plan as in
effect on December 31, 1993.
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4. Adjustments
4.1 At the discretion of the Committee, the Incentive Compensation payable
to any Participant for any Year may be adjusted either upward or
downward to reflect extraordinary events or circumstances.
5. Payment of Incentive Compensation
5.1 The Incentive Compensation payable pursuant to this Plan shall be paid
as soon as practicable following the end of the Year and the
determination and approval of the amounts payable, except as provided
in Section 3.5.
6. Termination of Participation
6.1 If a Participant in the Plan ceases to be a Participant for any
reason, he shall have no right to any incentive payments under the
Plan. However, at the sole discretion of the Committee, he may be
granted a pro rata payment for the Year in which he ceased to be a
Participant.
7. No Creation of Employment Rights
7.1 Nothing contained herein shall provide any employee of the Company
with any right to continued employment or in any way abridge the
rights of the Company to determine the terms and conditions of
employment, and whether to terminate the employment, of any employee.
8. Authority
8.1 Except as otherwise expressly provided herein, full power and
authority to interpret and administer this Plan shall be vested in the
Committee. The Committee may, in their sole discretion, adopt, amend,
modify, suspend or terminate such rules and policies as they may
determine in connection with the performance of their responsibilities
under the Plan.
9. Effective Date
9.1 This Plan, as amended and restated herein, shall be effective
beginning as of 1 January 1994.
10. Amendment and Termination
10.1 This Plan may be amended or terminated at any time at the sole
discretion of the Committee.
10 February 1994
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