1994 NEBS EXECUTIVE BONUS PLAN
(Effective as of June 26, 1993)
This Executive Bonus Plan was adopted by the Board of Directors of New
England Business Serve, Inc. (the "Company") onOctober 22, 1993 upon the
recommendation of its Organization andCompensation Committee for the purpose
of providing incentive compensation for the senior executives of the Company.
This Plan shall be governed by the following definitions and calculations.
I. Participants. The Participants in the Plan for the 1994
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fiscal year of the Company (the "Year") and their respective
Target Percentages shall be as follows:
A. Officers of the Company.
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Bartley H. Calder,
President and CEO 60%
Robert S. Brown,
Vice President - General Manager, Marketing 40%
Christopher H. Corbett,
Vice President - General Manager, Manufacturing 40%
and Information Resources
Edward M. Bolesky,
Vice President- General Manager, Administration 40%
and Customer Relations
Russell V. Corsini, Jr.,
Vice President - Finance 40%
Sally C. Davis,
Vice President - Human Resources 40%
Thomas M. Freeze,
Treasurer 40%
Timothy D. Althof,
Corporate Controller 40%
B. CEOs of Subsidiaries.
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Robert T. Richardson, President
NEBS Business Forms, Ltd. 40%
Robert A. Lay, President and Chief Executive
SYCOM, Inc. 40%
David G. Booth, Managing Director
NEBS Business Stationery 40%
C. Directors of Business Units and of Manufacturing.
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Steve H. Dedo,
Business Forms Director 40%
Linda A. Jacobs,
Marketing Products Director 40%
Ronald F. Verni,
Vice President - General Manager, Computer Forms/ 40%
Software and OWP
Steven G. Schlerf,
Manufacturing Director 40%
No Participant shall be eligible to participate in the NEBS Profit Sharing
Plan for any year in which he or she is entitled to participate in this Plan.
II. Target Bonus. The Target Bonus payable to a Participant with
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respect to the Year shall be an amount arrived at by multiplying his or her
base salary initially fixed for the Year by his or her Target Bonus Percentage.
III. Actual Bonuses.
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A. Officers of the Company. The Actual Bonus of each
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of the Participants who is an Officer of the Company, other
than Ronald F. Verni, shall be calculated by multiplying his
or her Target Bonus by a percentage which shall be 50% of the
sum of (i) a "Consolidated Sales Factor" equal to the
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percentage which the consolidated net sales in the Year are
of $259,734,000 (the "targeted consolidated net sales" for
the Year), and (ii) a "Consolidated Profit Factor" equal to
the percentage which the consolidated earnings per share of
the Year are of $1.00 per share (the "targeted consolidated
earnings per share" for the Year), as described below:
1. Consolidated Sales Factor equals 100% plus
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6.25% for each one percent by which
consolidated net sales are more than the
targeted consolidated net sales for the Year,
or 100% minus 6.25% for each one percent by
which consolidated net sales are less than the
targeted consolidated net sales for the Year
(calculated in either case to the nearest
one-tenth of one percent), provided that the
Sales Factor shall be 0% if net sales for the
Year are less than $238,955,000.
2. Consolidated Profit Factor equals 100% plus
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7.14% for each one percent by which
consolidated earnings per share are more than
the targeted consolidated earnings per share
for the Year, or 100% minus 7.14% for each one
percent by which consolidated earnings per
share are less than the targeted consolidated
earnings per share for the Year (calculated in
either case to the nearest one-tenth of one
percent), provided that the profit factor
shall be 0% if the earnings per share for the
Year are less than $.93.
No bonuses shall be payable to the Officers under this plan if the Company's
consolidated earnings per share for the Year are less than $.85.
B. Chief Executive Officers of Subsidiary Business
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Units.
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1. The Chief Executive of SYCOM, Inc. and the
Managing Director of NEBS Business Stationery
shall be paid an actual bonus which shall be
the sum of the following four products:
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(a) 15% of his Target Bonus times the
Consolidated Sales Factor determined pursuant
to Section A.1 above;
(b) 15% of his Target Bonus times the
Consolidated Profit Factor determined pursuant
to Section A.2 above;
(c) 35% of his Target Bonus times his unit's
sales factor determined pursuant to Section 3
or 5 below; and
(d) 35% of his Target Bonus times his unit's
profit factor determined pursuant to Section 4
or 6 below.
2. The President of NEBS Business Forms Limited
shall be paid an actual bonus which will be
the sum of the following six products.
(a) 15% of his Target Bonus times the
Consolidated Sales Factor determined pursuant
to Section A.1 above;
(b) 15% of his Target Bonus times the
Consolidated Profit Factor determined pursuant
to Section A.2 above;
(c) 25% of his Target Bonus times his unit's
sales factor determined pursuant to Section 7
below;
(d) 25% of his Target Bonus times his unit's
profit factor determined pursuant to Section 8
below;
(e) 10% of his Target Bonus times the sales
factor of NEBS Business Stationery determined
pursuant to Section 5 below; and
(f) 10% of his Target Bonus times the profit
factor of NEBS Business Stationery determined
pursuant to Section 6 below.
3. Sales Factor of SYCOM, Inc. equals 100% plus
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12.5% for each one percent by which its net
sales are more than $15,253,000 (its "targeted
net sales" for the Year), or 100% minus 12.5%
for each one percent by which its net sales
are less than its targeted net sales for the
Year (calculated in either case to the nearest
one-tenth of one percent), provided that the
Sales Factor of Sycom, Inc. shall be 0% if its
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net sales for the Year are less than
$14,643,000.
4. Profit Factor of SYCOM, Inc. equals 100% plus
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6.25% for each one percent by which its profit
from operations is more than $2,160,000 (its
"targeted profit from operations" for the
Year), or 100% minus 6.25% for each one
percent by which its targeted profit from
operations is less than its targeted profit
from operations for the Year (calculated in
either case to the nearest one-tenth of one
percent), provided that the profit factor
shall be 0% if its profit from operations for
the Year is less than $1,987,000.
5. Sales Factor of NEBS Business Stationery
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equals 100% plus 4.17% for each one percent by
which its net sales are more than 3,343,000
pounds (its "targeted net sales" for the
Year), or 100% minus 4.17% for each one
percent by which its net sales are less than
its targeted net sales for the Year
(calculated in either case to the nearest
one-tenth of one percent), provided that the
Sales Factor shall be 0% if its net sales for
the Year are less than 2,942,000 pound.
6. Profit Factor of NEBS Business Stationery
-----------------------------------------
equals 100% plus 0.5% for each one percent by
which its profit from operations is more than
69,000 pounds (its "targeted profit from
operations") for the Year, or 100% minus 0.5%
for each one percent by which its profit from
operations is less than its targeted profit
from operations for the Year (calculated in
either case to the nearest one-tenth of one
percent), provided that the profit factor
shall be 0% if its profit from operations for
the Year is negative.
7. Sales Factor of NEBS Business Forms Limited
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equals 100% plus 10% for each one percent by
which its net sales are more than $22,815,000
Canadian (its "targeted net sales" for the
Year), or 100% minus 10% for each one percent
by which its net sales are less than its
targeted net sales for the Year (calculated in
either case to the nearest one-tenth of one
percent), provided that the Sales Factor shall
be 0% if its net sales for the Year are less
than $21,674,000 Canadian.
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8. Profit Factor of NEBS Business Forms Limited
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equals 100% plus 5% for each one percent by
which its profit from operations is more than
$4,789,000 (its "targeted profit from
operations" for the Year), or 100% minus 5%
for each one percent by which its profit from
operations is less than its targeted profit
from operations for the Year (calculated in
either case to the nearest one-tenth of one
percent), provided that the profit factor
shall be 0% if its profit from operations for
the Year is less than $4,310,000.
No bonuses shall be paid to any CEO of a subsidiary business unit if (i) the
consolidated earnings per share are less than 85% of the targeted
consolidated earnings per share for the year or (ii) the profit from
operations of his business unit is less than 85% of the targeted profit from
operations for the Year of such unit(or negative in the case of NEBS Business
Stationery).
C. The Business Unit and Manufacturing Directors.
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1. The Directors of the Business Forms and
Marketing Products Units and the Vice-President
- General Manager, Computer Forms/Software and
OWP shall be paid an actual bonus which shall
be the sum of the following two products:
(a) 50% of his or her Target Bonus times his
or her unit's sales factor determined pursuant
to Sections 2,3 or 4, respectively below; and
(b) 50% of his or her Target Bonus times the
Consolidated Profit Factor determined pursuant
to Section A.2 above.
2. Sales Factor of Business Forms Unit equals 100%
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plus 12.5% for each one percent by which its
net sales are more than $103,928,000 (its
"targeted net sales for the Year"), or 100%
minus 12.5% for each one percent by which its
net sales are less than its targeted net sales
for the Year (calculated in either case to the
nearest one-tenth of one percent), provided
that the Sales Factor shall be 0% if its net
sales for the Year are less than $99,771,000.
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3. Sales Factor of Marketing Products Unit equals
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100% plus 12.5% for each one percent by which
its net sales are more than $35,977,000 (its
"targeted net sales" for the Year), or 100%
minus 12.5% for each one percent by which its
net sales are less than its targeted net sales
for the Year (calculated in either case to the
nearest one-tenth of one percent), provided
that the Sales Factor shall be 0% if its net
sales for the Year are less than $34,538,000.
4. Sales Factor of Computer Forms and Software
-------------------------------------------
Unit equals 100% plus 5% for each one percent
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by which its net sales are more than
$68,407,000 (its "targeted net sales" for the
Year), or 100% minus 5% for each one percent by
which its net sales are less than its targeted
net sales for the Year (calculated in either
case to the nearest one-tenth of one percent),
provided that the Sales Factor shall be 0% if
its net sales for the Year are less than
$61,566,000.
5. The Director of Manufacturing shall be paid an
actual bonus which will be the sum of the
following two products:
(a) 50% of his Target Bonus times the Sales
Factor of Domestic NEBS; and
(b) 50% of his Target Bonus times the
Consolidated Profit Factor determined pursuant
to Section A.2 above;
6. Sales Factor of Domestic NEBS equals 100% plus
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5.06% for each one percent by which the
Company's domestic net sales are more than
$221,611,000 (its "targeted domestic net sales"
for the Year), or 100% minus 5.06% for each one
percent by which its domestic net sales re less
than is targeted domestic net sales for the
Year (calculated in either case to the nearest
one-tenth of one percent), provided that the
Sales Factor shall be 0% if its domestic net
sales for the Year are less than $199,704,000.
No bonus shall be paid to any Business Unit Director or to the Director of
Manufacturing if (i) the consolidated earnings per
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share are less than 85% of the targeted consolidated earnings per share for
the year.
IV. Certain Definitions and Other Provisions.
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A. All references to "net" sales shall refer to
consolidated net sales of the Company or net sales
of a subsidiary business unit or business unit, as
the case may be, as reported or used in calculating
the Company's audited consolidated earnings.
B. For purposes of calculating the Consolidated Profit
factor, consolidated earnings per share for the Year
shall be determined by dividing the consolidated net
income from continuing operations for the Year by
the weighted average number of shares of Common
Stock outstanding during the Year. Consolidated net
income from continuing operations shall mean such
consolidated income, after taxes and after provision
for executive bonuses under this Plan, determined in
accordance with all of the accounting policies employed in
the preparation of the Company's audited financial
statements for the Year.
C. Consolidated net income, targeted consolidated net
income, the actual or targeted profit from operations of any
subsidiary business unit or the actual or targeted net sales
of any subsidiary business unit or business unit may, at the
discretion of the Organization and Compensation Committee,
be adjusted to eliminate the effect of (a) either the
acquisition or the divestiture by the Company of any
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subsidiary or division during the Year, and/or (b) the
imposition during the Year by Massachusetts or any other
state or states of sales taxes on services, materials or
supplies purchased by the Company the effect of which is not
allowed for in the Company's annual budget for the 1994
fiscal year or (c) any abatement of taxes or material
increase or decrease in Federal or State corporate tax
rates. Any such discretionary adjustment shall be decided
upon by the Organization and Compensation Committee, and
shall be announced to the affected Participants, promptly
after the occurrence of the motivating event.
D. "Profit from Operations" for any subsidiary business
unit of the Company shall be determined consistently with
the process whereby its targeted profit from operations for
the Year was determined and shall not reflect any charge for
executive bonuses payable under this Plan.
E. Domestic net sales for the Year means consolidated
net sales less the net sales of NEBS Business Forms, Ltd.
and NEBS Business Stationery.
F. Should a Participant die, retire, or become totally
disabled during the Year, he or she or his or her estate
shall be entitled to receive a bonus pro-rated in accordance
with the percentage of his or her annual salary earned from
the beginning of the Year up to the date of death,
retirement or disability. Should a Participant's employment
by the Company or a subsidiary business unit be terminated for any
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other reason, payment of any bonus hereunder for the
year in which such termination occurs is at the sole
discretion of the Organization and Compensation Committee.
G. This Plan shall be effective commencing as of June
26, 1993.
H. The intended operation of the foregoing formulas for
calculating actual bonuses are shown graphically in the
exhibits annexed hereto, which are incorporated herein by
this reference.
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