BMC INDUSTRIES, INC.
1996 MANAGEMENT INCENTIVE PLAN
OBJECTIVES
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- To focus management's attention on division's annual profit
performance and balance sheet management.
- To recognize the extraordinary contributions of individual
managers, in years when earnings exceed "Par" performance.
GLOSSARY OF TERMS
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"Maximum" Performance - That level of consolidated net earnings justifying
a "maximum" incentive award.
"Par" Performance - The level of consolidated net earnings, as
approved by the Board, justifying a "target
incentive award".
"Cut-in" Performance - The minimum level of consolidated net earnings,
defined as 95% of "Par", justifying an incentive
award.
"Target" Incentive - The percent (%) of base pay when a 100% incentive
award is earned.
"Minimum" Incentive - The percent (%) of base pay when a 50% incentive
award is earned.
"Maximum" Incentive - The percent (%) of base pay when a 150% incentive
award is earned.
"BMC Earnings Threshold" - The minimum level of consolidated net earnings
before a division participant in the Plan will be
eligible for an incentive award.
"Division DCE Threshold" - The "Cut-in" performance standard, expressed as
DCE, below which incentive will not be awarded.
1996 MANAGEMENT INCENTIVE PLAN SUMMARY
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PARTICIPANTS: Elected officers and key managers.
PERFORMANCE STANDARDS:
A. 1996 Corporate Performance Standards -
"Maximum" performance is 108.3% of the "Par" consolidated net earnings.
"Par" performance is the consolidated net earnings number, as approved
by the Board.
"Cut-in" performance is 95% of the "Par" consolidated net earnings.
B. 1996 Division Performance Standards -
The "BMC Earnings Threshold" is 75% of the 1996 Corporate "Cut-in"
performance standard.
The "DCE Threshold" is the "Cut-in" defined at the DCE line.
"Par" performance is the BUDGETED operating earnings (budgeted DCE).
AWARD LEVELS: "Target" incentive awards range from
10% to 57.25% of base salary, depending
on level of responsibility.
ORGANIZATION WEIGHTING: There is no organization weighting, i.e.,
Corporate participants earn awards based on
Corporate performance and division
participants earn awards based on division
performance.
INCENTIVE OPPORTUNITY: Individual incentive awards will be prorated
and calculated based on the following, once
the applicable "Thresholds" have been
exceeded.
- 150% of "Target" incentive is earned
when reported earnings equal or exceed
"Maximum".
- 100% of "Target" incentive is earned
when reported earnings equal "Par".
- 50% of "Target" incentive is earned
when reported earnings equal "Cut-in".
- No incentive will be paid when
reported earnings fall below "Cut-in".
- Division/Corporate staff
"Discretionary Incentive Pools" will
be generated when earnings performance
exceeds "Par". The "Pool" will be 10%
of the accrued incentive dollars at
"Par". Discretionary awards will be
in addition to the incentive awards by
formula. However, such awards cannot
exceed the "Pool" and must be approved
by the CEO.
PAYMENT FORM: Cash.