EXHIBIT 10.5
BJ'S WHOLESALE CLUB, INC.
MANAGEMENT INCENTIVE PLAN
1. Purpose
The purpose of the BJ's Wholesale Club, Inc. Management Incentive
Plan (the "Plan") is to provide officers and other employees who are key
to the growth and profitability of BJ's Wholesale Club, Inc. and its
subsidiaries with reward opportunities commensurate with their
performance relative to annual objectives.
2. Definitions
Unless the context requires otherwise, the following expressions as
used in the Plan shall have the meanings ascribed to each below, it being
understood that masculine, feminine and neuter pronouns are used
interchangeably, and that each comprehends the others.
"Committee" shall mean the BJ's Wholesale Club, Inc. Incentive Plan
Committee, consisting of the President and Chief Executive Officer of
BJ's Wholesale Club, Inc., who shall serve as the Chairman of the
Committee; the Chairman of the Board of BJ's Wholesale Club, Inc.; the
Chief Financial Officer of BJ's Wholesale Club, Inc.; and others who from
time to time are designated by the Chairman of the Committee to serve as
members of the Committee.
"Company" shall mean BJ's Wholesale Club, Inc. and its subsidiaries.
"ECC" shall mean the Executive Compensation Committee of the Board
of Directors of BJ's Wholesale Club, Inc.
"Effective Date" shall mean the date on which Waban Inc. completes
the spin-off of the Company by distributing to Waban's stockholders on a
pro rata basis all of the outstanding shares of Common Stock of the
Company held by Waban Inc.
"Fiscal Year" shall mean the period ending on the last Saturday in
January, and commencing on (i) the Sunday following the last Saturday in
January of the preceding calendar year or (ii) with respect to the Fiscal
Year in which the Effective Date occurs, such Effective Date.
"Participant" shall mean an officer or other employee of the Company
who is designated a participant pursuant to Section 5 below.
"Performance Criteria" shall mean the standards of measurement of
Company performance and individual performance for each Performance
Period as established by the Committee and the ECC pursuant to paragraph
(a) of Section 6 below.
"Performance Goals" shall mean the levels of performance with
respect to each Performance Criterion at which awards are payable
pursuant to this Plan. Performance goals are established by the Committee
and the ECC pursuant to paragraph (b) of Section 6 below.
"Performance Period" shall mean one Fiscal Year or, with respect to
the Fiscal Year in which the Effective Date occurs, the remainder of such
Fiscal Year.
3. Administration
This Plan shall be administered by the ECC, which in its sole
discretion may take into account recommendations of the Committee. The
ECC shall have full authority to interpret the Plan; to establish, amend,
and rescind rules for carrying out the Plan; to administer the Plan; to
determine the terms and provisions of any agreements pertaining to the
Plan; and to make all other determinations necessary or advisable for its
administration.
Any person objecting to any interpretation, rule, determination or
other action made or taken by the Committee or the ECC which affects said
person shall have the right to appeal in writing to the ECC, setting
forth the objections in reasonable detail, provided that such appeal
shall be made within 90 days after promulgation of such interpretation,
rule, or other determination, or such additional time as the ECC shall
deem reasonable.
The ECC shall not be bound to any standards of uniformity or
similarity of action, interpretation or conduct in the discharge of its
duties hereunder, regardless of the apparent similarity of the matters
coming before the ECC. Its determination shall be binding on all parties.
No member or former member of the Committee, the ECC, or the Board
of Directors of the Company shall be liable for any action or
determination made in good faith with respect to the Plan or any award or
payment made under the Plan.
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4. Eligibility
For each Performance Period, the ECC shall designate, based upon
recommendations of the Committee, Participants to receive annual
management incentive awards, subject to the terms and conditions of the
Plan. Participants in the Plan shall be key employees of the Company,
including such executives and other full-time employees of the Company as
the ECC shall, at any time, designate as Participants for said
Performance Period.
5. Description of Awards
(a) Designation of Performance Criteria
At the commencement of each Performance Period, the Committee shall
recommend, for the ECC's approval, one or more Performance Criteria
for said Performance Period and the relative weight to be given to
each Performance Criterion. Performance Criteria and the weighting
thereof may vary by Participant and may be different for different
Performance Periods. Such Performance Criteria shall include only
the following measures: operating income, pre-tax income, net
income, gross profit dollars, costs, any of the preceding measures
as a percent of sales, earnings per share, sales, return on equity,
and return on investment.
(b) Performance Goals
At the commencement of each Performance Period, the Committee shall
establish a range of Performance Goals from minimum to target to
maximum for each Performance Criterion for said Performance Period.
Performance Goals may vary by Participant and may be different for
different Performance Periods.
At any time designated by the ECC during a Performance Period or
thereafter, but prior to award payment, appropriate adjustments in
the Performance Goals may be made to avoid undue windfalls or
hardships due to external conditions outside the control of
management, nonrecurring or abnormal items, changes in accounting
practices or such other matters as the Committee shall, in its sole
discretion, determine, subject to paragraph (d) below.
Performance Goals and any adjustments thereto shall be reported to
the ECC. The ECC shall have the right at its election to reject any
Performance Goals or adjustments and direct reconsideration by the
Committee.
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(c) Award Opportunity
At the commencement of each Performance Period, the Committee shall
assign to each Participant the minimum, target, and maximum award
opportunities to be earned for said Performance Period based upon
the Participant's position and ability to impact annual performance
relative to goals during the Performance Period. Said award
opportunities are subject to the approval of the ECC. Award
opportunity may be expressed as a fixed amount or as a percentage of
the Participant's base salary earned for the Performance Period. No
individual award opportunity in any calendar year shall exceed
$1,000,000 or, if less, 100% of the base salary earned by the
Participant for the applicable Performance Period.
From time to time, discretionary awards, in addition to the annual
management incentive awards, may be made by the Committee to any
Participant due to outstanding performance or extraordinary
circumstances which occur during the Performance Period. No
discretionary award shall be made to any Participant whose
compensation is subject to the approval of the ECC, unless such
award shall be approved by the ECC. All discretionary awards shall
be reported to the ECC for each Performance Period.
(d) Adjustments to Performance Goals for Certain Officers
The Committee shall make no adjustments to the Performance Goals
whose effect is to increase the incentive payment to the Chief
Executive Officer or to other executive officers as of the end of
the fiscal year who are named in the proxy statement, except for the
following:
1) Events classified as extraordinary items or discontinued
operations or presented as special nonrecurring charges (or
income) in accordance with generally accepted accounting
principles.
2) Disposal of a business segment or a group of two or more
warehouse stores, a major administrative unit, or major assets,
if quantified and disclosed in Management's Discussion and
Analysis of Financial Condition and Results of Operations of the
Company's Annual Report on Form 10-K.
3) Conversion of convertible bonds or preferred stock convertible
into common stock; a repurchase by the Company of outstanding
shares of stock, if such a repurchase has a material impact on
the performance that is being measured; or an increase in the
number of shares of common stock for earnings per share
calculation
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purposes due to a new equity or convertible debenture offering,
but not by exercise of stock options, restricted stock or other
stock-based awards under the Company's 1997 Stock Incentive
Plans or any similar plan.
4) Balance sheet recapitalization or restructuring that materially
alters the allocation between debt and equity for the Company.
5) Changes in accounting practice to comply with new legislation or
with rules promulgated by the Securities and Exchange Commission
or the Financial Accounting Standards Board and changes in tax
laws that affect tax rates, credits, or the definition of
taxable income, if material.
6) Unusual and material losses beyond the Company's control, such
as acts of God (e.g., earthquake or widespread hurricane
damage).
7) Reserves for future period events which will not occur until
after the performance measurement period.
8) Adjustments attributable to prior periods in the case of a newly
acquired business.
9) Adjustments of goals made immediately after completion by the
Company's independent public accountants of the audit of the
Company's financial statements for the fiscal year immediately
preceding the Performance Period, made solely to "true-up" goals
that were based on estimated results for said preceding year.
10) Gains and losses from sales of a minority interest in a
subsidiary.
11) Net incremental expense incurred by the Company as a result of
opening new warehouse stores in excess of the number
incorporated in the Performance Goals. The amount of the
adjustment shall be equal to the average operating loss incurred
by new warehouse stores opened by the Company in the same fiscal
year.
In no event, however, shall the Committee make any adjustment which
would cause incentive awards not to qualify as performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986, as
amended.
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6. Determination of Awards
(a) Upon completion of each Performance Period and certification of the
Company's financial statements by the Company's independent public
accountants for the Fiscal Year included in such Performance Period,
the ECC will review performance relative to Performance Goals, as
adjusted from time to time in accordance with paragraph (b) of
Section 5 above, and determine the value of the awards for each
Performance Period.
Achievement of all Performance Goals will result in payment of a
Participant's target award. Failure to achieve Performance Goals
will result in a decrease or elimination of the Participant's award.
Exceeding performance goals will result in an award greater than the
target award but not greater than the maximum award.
(b) If an employee becomes a Participant after the beginning of a
Performance Period, the award payable to such employee will be pro-
rated in accordance with the portion of the Performance Period
during which such employee is a Participant.
(c) In the event of termination of employment of a Participant for any
reason prior to the last day of the Performance Period, a
Participant shall have no further rights under the Plan thereafter
and shall not be entitled to payment of any award.
If termination of employment occurs (i) by reason of death, (ii) due
to normal retirement under a retirement plan of the Company, or
(iii) due to early retirement after age 55 with the consent of the
Company, the ECC may, in its sole discretion, value and direct that
some portion of the award be deemed earned and payable, taking into
account the duration or employment during the Performance Period,
the Participant's performance, and such other matters as the ECC
shall deem appropriate.
In the event of termination of employment for cause, as defined and
determined by the ECC in its sole discretion, no payment shall be
made with regard to any prior or current Performance Period.
(d) If a Participant shall be actively employed less than a full
Performance Period because of an accident or illness but shall
complete active employment during one-half of the weeks of said
Performance Period, the incentive award otherwise payable to said
Participant for said Performance Period shall not be reduced because
of a failure of active employment because of such accident or
illness.
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If a Participant shall be actively employed less than a full
Performance Period because of an accident or illness and shall not
complete active employment during one-half of the weeks of said
Performance Period, said Participant shall receive such incentive
award, if any, for said Performance Period as the Committee shall
determine, subject to approval by the ECC. The time during which a
Participant receives sick leave and/or vacation payments shall be
deemed active employment time. Time during which a Participant
receives short-term income protection, short-term disability and/or
long-term disability payments shall not be deemed active employment
time.
7. Payment of Awards
As soon as practicable after valuation of the award for each
Performance Period, payment will be made in cash with respect to the
award earned by each Participant.
8. Deferral of Awards
Participants who are designated by the ECC as being eligible to
participate in the Company's General Deferred Compensation Plan may elect
to defer all or a portion of their awards in accordance with the terms of
such General Deferred Compensation Plan.
9. Designation of Beneficiary
(a) Subject to applicable law, each Participant shall have the right to
file with the Company, to the attention of the ECC or the Committee,
a written designation of one or more persons as the beneficiary(ies)
who shall be entitled to receive the amount, if any, payable under
the Plan upon his death. A Participant may from time to time revoke
or change the beneficiary by filing a new designation with the ECC
or the Committee. The last such designation received by the ECC or
the Committee shall be controlling; provided, however, that no
designation, change, or revocation thereof shall be effective unless
received by the ECC or the Committee prior to the Participant's
death, and in no event shall it be effective as of a date prior to
receipt.
(b) If no such beneficiary designation is in effect at the time of a
Participant's death, or if no designated beneficiary survives the
Participant, or if such designation conflicts with law, the payment
of the amount, if any, payable under the Plan upon the Participant's
death shall be made to the Participant's estate by the Committee. If
the Committee is in doubt as to the right of any person to receive
any amount, the Committee may retain
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such amount, without liability for any interest thereon, until the
rights thereto are determined, or the Committee may pay such amount
into any court of appropriate jurisdiction, and such payment shall
be a complete discharge of the liability of the Plan, the Company,
the Committee and the ECC therefor.
10. Notices
Each Participant whose employment relationship with the Company has
terminated, either voluntarily or involuntarily, shall be responsible for
furnishing the Committee or the Chief Financial Officer of the Company
with the current and proper address for mailing of notices and the
delivery of agreements and payments. Any notice required or permitted to
be given shall be deemed given if directed to the person to whom
addressed at such address and mailed by regular United States mail,
first-class and prepaid. If any item mailed to such address is returned
undeliverable to the addressee, mailing will be suspended until the
Participant furnishes the proper address.
11. Rights of Participants
Nothing contained in the Plan and no action taken pursuant to the
Plan shall create or be construed to create a trust of any kind, or a
fiduciary relationship between the Company and any Participant or such
Participant's legal representative or designated beneficiary, or other
persons.
If and to the extent that any Participant or his legal
representative or designated beneficiary, as the case may be, acquires a
right to receive any payment from the Company pursuant to the Plan, such
right shall be no greater than the right of an unsecured general creditor
of the Company.
12. No Employment Rights
Nothing in the Plan or any other document describing or referring to
the Plan shall be deemed to confer on any Participant the right to
continue in the employ of the Company or affect the right of the Company
to terminate the employment of any such person with or without cause.
13. Certain Payments Upon a Change of Control
If, upon a Change of Control (as defined in Annex A hereto) of the
Company, amounts payable or that would or might be payable in respect of
an individual under the Plan instead are paid to such individual or such
individual's estate or beneficiary pursuant to any change of control
severance plan or agreement, or any similar plan, agreement or
arrangement to which the Company
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is a party, payments in respect of such individual hereunder shall be
reduced pro tanto.
14. Nonalienation of Awards
No amounts payable or other rights under the Plan shall be sold,
transferred, assigned, pledged, or otherwise disposed of or encumbered by
a Participant, except as provided herein, nor shall they be subject to
attachment, garnishment, execution, or other creditor's processes.
15. Withholding Taxes
The Company shall have the right to deduct withholding taxes from
any payments made pursuant to the Plan, or make such other provisions as
it deems necessary or appropriate to satisfy its obligations for
withholding federal, state, or local income or other taxes from payments
to the Participant.
16. Termination, Amendment, and Modification
The Committee, ECC or the Board of Directors may from time to time
amend, modify, or discontinue the Plan or any provision hereof. No
amendment to, or discontinuance or termination of, the Plan shall,
without the written consent of the Participant, adversely affect any
rights of such Participant that have vested. This Plan shall continue
until terminated by the Committee, ECC or the Board of Directors of the
Company.
17. Headings and Captions
The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Plan, and shall not
be employed in the construction of the Plan.
18. Controlling Law
This Plan shall be construed and enforced according to the laws of
the Commonwealth of Massachusetts, to the extent not preempted by Federal
law, which shall otherwise control.
19. Miscellaneous Provisions
(a) All costs and expenses involved in administering the Plan as
provided herein, or incident thereto, shall be borne by the Company.
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(b) If any Participant shall also participate in other annual incentive
plans of the Company, the ECC shall determine the amount, if any, by
which such Participant's award under the Plan shall be adjusted, so
as to coordinate the benefits under the Plan with the other plans.
(c) The Committee or the ECC may, in its sole discretion, reduce or
eliminate awards granted or money payable to any Participant or all
Participants if it determines that such awards or payments may cause
the Company to violate any applicable law, regulation, controls, or
guidelines. Such reduction or elimination may be made
notwithstanding that the possible violation might be eliminated by
reducing or not increasing compensation or benefits of other
associates, it being the intent of the Plan not to inhibit the
discretion of the Company to provide such forms and amounts of
compensation and benefits to employees as it deems advisable.
20. Continuation Incentive Awards and Replacement Incentive Awards Granted in
Connection with Spin-Off
Notwithstanding any other provision of the Plan, in connection with
the spin-off of the Company by Waban Inc. ("Waban"), the Committee,
subject to the approval of the ECC, which approval may be granted or
withheld in the ECC's sole discretion, may grant to any Participant (i)
incentive awards which are intended to serve as a continuation of
incentive awards previously granted to such Participant ("Continuation
Incentive Awards") under the Waban Management Incentive Plan (the
"WMIP"), and (ii) incentive awards which are intended to serve as a
replacement of incentive awards previously granted to such Participant
("Replacement Incentive Awards") under the WMIP.
Each Continuation Incentive Award shall (i) be considered to be a
continuation of the incentive award previously granted under the WMIP, as
adjusted to reflect the assumption by the Company of Waban's obligations
under such incentive award, (ii) be based upon the same Performance
Periods and Performance Criteria as the continued incentive award, as
adjusted to reflect the effects of the spin-off on the Company structure
(e.g., interest expense, corporate overhead), and (iii) as determined by
the Committee (subject to the approval of the ECC), provide no additional
value or benefits other than those provided by the continued incentive
award, the approval of the ECC to be final and binding for all purposes.
In addition, with respect to each Continuation Incentive Award, a Change
in Control shall have the meaning set forth in Annex B hereto. Except as
otherwise set forth in this Section 20 or determined by the Committee
(subject to the approval of the ECC), each Continuation Incentive Award
shall be subject to all other terms of the Plan and shall be subject,
before payment, to certification by the ECC that all Performance Criteria
have been satisfied.
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Each Replacement Incentive Award shall be granted upon such terms and
conditions as the Committee (subject to the approval of the ECC) deems
appropriate and in accordance with such Performance Periods (including a
Performance Period beginning prior to the effective date of the Plan) and
Performance Criteria as the Committee deems appropriate.
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ANNEX A
DEFINITION OF CHANGE IN CONTROL
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For the purposes of this Plan, a "Change of Control" shall mean:
(a) The acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any acquisition by any corporation pursuant to a transaction which satisfies the
criteria set forth in clauses (i), (ii) and (iii) of subsection (c) of this
definition; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequently
to the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board (except that this proviso shall
not apply to any individual whose initial assumption of office as a director
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board); or
(c) Consummation of a reorganization, merger or consolidation
involving the Company or a sale or other disposition of all or substantially all
of the assets of the Company (a "Business Combination"), in each case, unless,
immediately following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, of the
corporation resulting from such Business Combination (which as used in section
(c) of this definition shall include, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business
Combination, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation and (iii) at least half
of the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
ANNEX B
DEFINITION OF CHANGE IN CONTROL
WITH RESPECT TO CONTINUATION INCENTIVE AWARDS
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For the purposes of the Plan, "Change of Control" with respect to
Continuation Incentive Awards shall mean the occurrence of any one of the
following events:
(a) there occurs a change of control of the Company of a nature that
would be required to be reported in response to Item 1(a) of the
Current Report on Form 8-K pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"); provided,
however, that no transaction shall be deemed to be a Change of
Control as to a Participant (i) if the person or each member of a
group of persons acquiring control is excluded from the definition
of the term "Person" hereunder or (ii) unless the ECC shall
otherwise determine prior to such occurrence, if the Participant
or a Participant Related Party is the Person or a member of a
group constituting the Person acquiring control; or
(b) any Person other than the Company, any wholly owned subsidiary of
the Company, or any employee benefit plan of the Company or such a
subsidiary becomes the owner of 20% or more of the Company's
Common Stock and thereafter individuals who were not directors of
the Company prior to the date such Person became a 20% owner are
elected as directors pursuant to an arrangement or understanding
with, or upon the request of or nomination by, such Person and
constitute at least 1/4 of the Company's Board of Directors;
provided, however, that unless the ECC shall otherwise determine
prior to the acquisition of such 20% ownership, such acquisition
of ownership shall not constitute a Change of Control as to a
Participant if the Participant or a Participant Related Party is
the Person or a member of a group constituting the Person
acquiring such ownership; or
(c) there occurs any solicitation or series of solicitations of
proxies by or on behalf of any Person other than the Company's
Board of Directors and thereafter individuals who were not
directors of the Company prior to the commencement of such
solicitation or series of solicitations are elected as directors
pursuant to an arrangement or understanding with, or upon the
request of or nomination by, such Person and constitute at least
1/4 of the Company's Board of Directors; or
(d) the Company executes an agreement of acquisition, merger or
consolidation which contemplates that (i) after the effective date
provided for in such agreement, all or substantially all of the
business and/or assets of the Company shall be owned, leased or
otherwise controlled by another
Person and (ii) individuals who are directors of the Company when
such agreement is executed shall not constitute a majority of the
board of directors of the survivor or successor entity immediately
after the effective date provided for in such agreement; provided,
however, that unless otherwise determined by the ECC, no
transaction shall constitute a Change of Control as to Participant
if, immediately after such transaction, the Participant or any
Participant Related Party shall own equity securities of any
surviving corporation ("Surviving Entity") having a fair value as
a percentage of the fair value of the equity securities of such
Surviving Entity greater than 125% of the fair value of the equity
securities of the Company owned by the Participant and any
Participant Related Party immediately prior to such transaction,
expressed as a percentage of the fair value of all equity
securities of the Company immediately prior to such transaction
(for purposes of this paragraph ownership of equity securities
shall be determined in the same manner as ownership of Common
Stock); and provided, further, that, for purposes of this
paragraph (d), if such agreement requires as a condition precedent
approval by the Company's shareholders of the agreement or
transaction, a Change of Control shall not be deemed to have taken
place unless and until such approval is secured (but upon any such
approval, a Change of Control shall be deemed to have occurred on
the date of execution of such agreement).
In addition, for purposes of this Annex B the following terms have
the meanings set forth below:
"Common Stock" shall mean the then outstanding Common Stock
of the Company plus, for purposes of determining the stock
ownership of any Person, the number of unissued shares of Common
Stock which such Person has the right to acquire (whether such
right is exercisable immediately or only after the passage of
time) upon the exercise of conversion rights, exchange rights,
warrants or options or otherwise. Notwithstanding the foregoing,
the term Common Stock shall not include shares of Preferred Stock
or convertible debt or options or warrants to acquire shares of
Common Stock (including any shares of Common Stock issued or
issuable upon the conversion or exercise thereof) to the extent
that the Board of Directors of the Company shall expressly so
determine in any future transaction or transactions.
A Person shall be deemed to be the "owner" of any Common
Stock:
(i) of which such Person would be the "beneficial owner," as
such term is defined in Rule 13d-3 promulgated by the
Securities and Exchange Commission (the "Commission")
under the Exchange Act, as in effect on March 1, 1989; or
(ii) of which such Person would be the "beneficial owner" for
purposes of Section 16 of the Exchange Act and the rules of the
Commission promulgated thereunder, as in effect on March 1,
1989; or
(iii) which such Person or any of its affiliates or associates (as
such terms are defined in Rule 12b-2 promulgated by the
Commission under the Exchange Act, as in effect on March 1,
1989) has the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options or otherwise.
"Person" shall have the meaning used in Section 13(d) of the Exchange
Act, as in effect on March 1, 1989; provided, however, that the term "Person"
shall not include (a) any individuals who are descendants of Max Feldberg or
Morris Feldberg, (b) any relatives of the fourth degree of consanguinity or
closer of such descendants or (c) custodians, trustees or legal representatives
of such persons.
A "Participant Related Party" shall mean any affiliate or associate of
the Participant other than the Company or a Subsidiary of the Company. The terms
"affiliate" and "associate" shall have the meanings ascribed thereto in Rule
12b-2 under the Exchange Act (the term "registrant" in the definition of
"associate" meaning, in this case, the Company).
"Participant" means a participant in the Plan.