Exhibit 10.13
FY2000 NEBS EXECUTIVE BONUS PLAN
(EFFECTIVE AS OF JUNE 28, 1999)
This Executive Bonus Plan (the "Plan") was adopted by the Board of
Directors of New England Business Service, Inc. (the "Company") on July 23, 1999
upon the recommendation of its Organization and Compensation Committee for the
purpose of providing incentive compensation for the senior executives and
managers of the Company and its subsidiaries. This Plan shall be governed by
the following definitions and calculations.
I. Participants. The participants in the Plan for the 2000 fiscal year of the
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Company (the "Year") and their respective target bonus percentages shall be
as follows:
A. Officers of the Company.
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Chairman, President & Chief Executive Officer 70%
Senior Vice President and President, Diversified Operations 60%
Senior Vice President and President, NEBS Direct Marketing 60%
Senior Vice President and President, Chiswick Trading 60%
Senior Vice President and President, RapidForms 60%
Senior Vice President, Information Systems 60%
Senior Vice President, Chief Financial Officer 60%
Senior Vice President, Human Resources 60%
Senior Vice President, Manufacturing and Technical Operations 60%
Senior Vice President, Business Management and Development 60%
Senior Vice President, Corporate Channel Marketing 60%
Vice President and President, McBee Systems 60%
Vice President, Investor Relations 50%
Vice President, Controller 50%
General Counsel and Secretary 50%
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B. CEOs of Subsidiaries.
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Managing Director, NEBS Business Stationery 40%
President and Chief Executive, NEBS Business Forms, Ltd. 40%
II. Target Bonus. The target bonus payable to a participant with respect to
the Year shall be an amount arrived at by multiplying his base salary at
the end of the Year by his target bonus percentage.
III. Actual Bonus. The actual bonus of each participant shall be calculated
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based on actual results vs. targeted objectives. No bonus shall be paid if
the Company's consolidated net income for the Year is less than 90% of the
targeted net income objective.
A. Chairman, President & Chief Executive Officer.
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The actual bonus of this participant shall be the sum of the following:
(a) Each 1% by which consolidated net sales are more than 95% up to
105% of the targeted consolidated net sales for the Year equals
5.6% of his base salary, plus each 1% by which consolidated net
sales are more than 10.5% of the targeted consolidated net sales
for the Year equals 2.8% of his base salary; and
(b) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year
equals 5.6% of his base salary, plus each 1% which consolidated
net income is more than 105% of the targeted consolidated net
income for the Year equals 2.8% of his base salary; and
(c) Up to 14% of his base salary based on his attainment of
certain personal objectives established by the Organization and
Compensation Committee, as determined by the latter.
B. Senior Vice President, Business Management & Development; Senior Vice
President, Chief Financial Officer; Senior Vice President, Human
Resources; Senior Vice President, Information Systems; Senior Vice
President, Manufacturing and Technical Operations; Senior Vice
President, Corporate Channel Marketing.
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The actual bonus of these participants shall be the sum of the
following:
(a) Each 1% by which consolidated net sales are more than 95% up to
105% of the targeted consolidated net sales for the Year equals
4.8% of his base salary, plus each 1% by which consolidated net
sales are more than 105% of the targeted consolidated net sales
for the Year equals 2.4% of his base salary; and
(b) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year equals
4.8% of his base salary, plus each 1% by which consolidated net
income is more than 105% of the targeted consolidated net income
for the Year equals 2.4% of his base salary; and
(c) Up to 12% of his base salary based on the degree of his
attainment of certain personal objectives established by the
Chairman, President & Chief Executive Officer, as determined by
the latter.
C. Senior Vice President and President, Chiswick Trading.
The actual bonus of this Participant shall be the sum of the following:
(a) Each 1% by which channel net sales are more than 95% up to 105%
of the targeted channel net sales for the Year equals 4.8% of his
base salary, plus each 1% by which channel net sales are more
than 105% of the targeted channel net sales for the Year equals
2.4% of his base salary; and
(b) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year
equals 3.0% of his base salary, plus each 1% by which
consolidated net income is more than 105% of the targeted
consolidated net income for the Year equals 1.5% of his base
salary; and
(c) Each 1% by which channel profit from operations is more than
95% up to 105% of the targeted channel profit from operation for
the Year equals 1.8% of his base salary. Payment for the
attainment of channel profit from operations will be capped at
200% of target payment (105%) achievement); and
(d) Up to 12% of his base salary based on his attainment of certain
personal objectives established by the Chairman, President &
Chief Executive Officer, as determined by the latter.
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D. Senior Vice President and President, Diversified Operations.
The actual bonus of this participant shall be the sum of the following:
(a) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year equals
3.0% of his base salary, plus each 1% by which consolidated net
income is more than 105% of the targeted consolidated net income
for the year equals 1.5% of his base salary; and
(b) Each 1% by which consolidated net sales are more than 95% up to
105% of the targeted consolidated net sales for the Year equals
1.8% of his base salary, plus each 1% by which consolidated net
sales are more than 105% of the targeted consolidated net sales
for the Year equals 0.9% of his base salary; and
(c) Each 1% by which channel net sales are more than 95% up to 105%
of the targeted channel net sales for the Year equals 2.4% of his
base salary, plus each 1% by which channel net sales are more
than 105% of the targeted channel net sales for the Year equals
1.2% of his base salary; and
(d) Each 1% by which channel profit from operations is more than 95%
up to 105% of the targeted channel profit from operations for the
Year equals 2.4% of his base salary. Payment for the attainment
of channel profit from operations will be capped at 200% of
target payment (105%); and
(e) Up to 12% of his base salary based on the degree of his
attainment of certain personal objectives established by the
Chairman, President & Chief Executive Officer, as determined by
the latter.
E. Senior Vice President and President, NEBS Direct Marketing; Senior
Vice President and President, RapidForms.
The actual bonus of these participants shall be the sum of the
following:
(a) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year equals
3.0% of his base salary, plus each 1% by which consolidated net
income is more than 105% of the targeted consolidated net income
for the Year equals 1.5% of his base salary; and
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(b) Each 1% by which channel net sales are more than 95% up to
105% of the targeted channel net sales for the Year equals 3.0%
of his base salary, plus each 1% by which channel net sales are
more than 105% of the targeted channel net sales for the Year
equals 1.5% of his base salary; and
(c) Each 1% by which combined net sales of the NEBS Direct
Marketing and RapidForms channels are more than 95% up to
105% of the targeted combined net sales of the NEBS Direct
Marketing and RapidForms channels for the Year equals 1.8% of
his base salary, plus each 1% by which combined net sales of the
NEBS Direct Marketing and RapidForms channels are more than
105% of the targeted combined net sales of NEBS the Direct
Marketing and RapidForms channels for the Year equals 0.9% of
his base salary; and
(d) Each 1% by which channel profit form operations is more than
95% up to 105% of the targeted channel profit from operations for
the Year equals 1.8% of his base salary. Payment for the
attainment of channel profit from operations will be capped at
200% of target payment (105%) achievement; and
(e) Up to 12% of his base salary based on the degree of his
attainment of certain personal objectives established by the
Chairman, President and Chief Executive Officer, as determined by
the latter.
F. Vice President and President, McBee Systems.
The actual bonus of this participant shall be the sum of the following:
(a) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year equals
3.0% of his base salary, plus each 1% by which consolidated net
sales are more than 105% of the targeted consolidated net sales
for the Year equals 1.5% of his base salary; and
(b) Each 1% by which McBee Systems profit from operations are
more than 95% up to 105% of the targeted McBee Systems profit
from operations for the Year equals 3.6% of his base salary, plus
each 1% by which McBee Systems profit from operations are more
than 105% of the targeted McBee Systems profit from operations
for the Year equals 1.8% of his base salary; and
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(c) Each 1% by which McBee Systems net sales are more than 95% up
to 105% of the targeted McBee Systems net sales for the Year
equals 3.0% of this base salary, plus each 1% by which McBee
Systems net sales is more than 105% of the targeted McBee
Systems net sales for the Year equals 1.5% of his base salary;
and
(d) Up to 12.0% of his base salary based on the degree of attainment
of certain personal objectives established by the Chairman,
President & Chief Executive Officer, as determined by the latter.
G. Vice President, Investor Relations; Vice President, Controller; General
Counsel and Secretary.
The actual bonus of these participants shall be the sum of the
following:
(a) Each 1% by which consolidated net sales are more than 95% up to
105% of the targeted consolidated net sales for the Year equals
4.0% of his base salary, plus each 1% by which consolidated net
sales are more than 105% of the targeted consolidated net sales
for the Year equals 2.0% of his base salary; and
(b) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year equals
4.0% of his base salary, plus each 1% by which consolidated net
income is more than 105% of the targeted consolidated net income
for the Year equals 2.0% of his base salary; and
(c) Up to 10% of his base salary based on the degree of his
attainment of certain personal objectives established by the
Chairman, President & Chief Executive Officer, as determined by
the latter.
H. Chief Executive Officers of Subsidiaries.
The actual bonus of these participants shall be the sum of the
following:
(a) Each 1% by which consolidated net income is more than 95% up to
105% of the targeted consolidated net income for the Year equals
2.0% of his base salary, plus each 1% by which consolidated net
income is more than 105% of the targeted consolidated net income
for the Year equals 1.0% of his base salary; and
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(b) Each 1% by which subsidiary net sales are more than 95% up to
105% of the targeted subsidiary net sales for the Year equals
3.2% of his base salary, plus each 1% by which subsidiary net
sales are more than 105% of the targeted subsidiary net sales for
the Year equals 1.6% of his base salary; and
(c) Each 1% by which subsidiary profit from operations is more than
95% up to 105% of the targeted subsidiary profit from operations
for the Year equals 1.2% of his base salary. Payment for the
attainment of channel profit from operations will be capped at
200% of target payment (105% achievement); and
(d) Up to 8% of his base salary based on the degree of his attainment
of certain personal objectives established by the Chairman,
President & Chief Executive Officer, as determined by the latter.
a) Bonus Payments
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A. For participants with 60% or 70% bonus targets; 75% of the gross payment
will be in the form of cash; 25% of the gross payment will be in the
form of NEBS Stock with a share price which is established at the close
of trading on the New York Stock Exchange on the third business day
following the issuance of the press release disclosing the Company's
financial results for the fourth fiscal quarter of the Year. Cash
payment will be made within 60 days after the close of the Year. Stock
awarded under the plan will be in the form of Restricted Stock with
terms and conditions detailed in the form of a Restricted Stock
Agreement attached hereto.
B. For participants with 40% or 50% bonus targets: 75% of the net payment
will be in the form of cash; 25% of the net payment will be in the form
of NEBS Stock with a share price which is established at the close of
trading on the New York Stock Exchange on the third business day
following the issuance of the press release disclosing the Company's
financial results for the fourth fiscal quarter of the Year. All bonus
payments will be made within 60 days after the close of the Year.
C. At their option and with the authorization of the Chief Executive
Officer, participants, other than the Chief Executive Officer and the
four next most highly compensated executive officers, may receive their
bonus entirely in cash if the payment earned is less than 25% of
annualized base salary.
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V. 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 distribution channel or a 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 actual bonuses, consolidated net income
for the Year 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. Actual or targeted consolidated net income; actual or targeted
consolidated sales; actual or targeted profit from operations of any
business unit or distribution channel; or actual or targeted net sales
of any business unit or distribution channel man, 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 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 or any subsidiary of the Company the effect of which is not
allowed for in the Company's annual budget for the 2000 fiscal year or
(c) any abatement of taxes or material increase or decrease in Federal
or State corporate tax rates. It is the intention of the Organization
and Compensation Committee that any such discretionary adjustment shall
be made by it, and shall be announced to the affected participants,
promptly after the occurrence of the motivating event, but failure to
act promptly shall not deprive the Committee of its power to make such
an adjustment at a later date.
D. Should a participant die, retire, or become totally disabled during the
Year, he or his estate shall be entitled to receive a bonus prorated in
accordance with the percentage of his 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 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.
E. If a participant assumes a new position during the Year, the
Organization and Compensation Committee may make an appropriate
adjustment in his target bonus and/or the means of calculating his
actual bonus, effective from and after that event.
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F. If a Change of Control event (as defined in Section 11 of the
Company's 1997 Key Employee and Eligible Director Stock Option and Stock
Appreciation Rights Plan) occurs, the Company will within sixty (60)
days following such event pay each participant a prorated bonus through
the date thereof as hereinafter provided, whereupon this Plan will
terminate. The portion of the bonus based on factors other than personal
objectives shall be calculated based on a comparison of (i) actual
results of the Company through the end of the calendar quarter next
preceding the Change in Control event to (ii) the targeted quarterly
performance criteria set forth on the schedules attached hereto. The
portion of the bonus based on personal objectives will be calculated
through the end of the calendar quarter next preceding the Change of
Control event to the extent equitable and reasonably practicable in the
judgment of the Organization and Compensation Committee. Qualitative
measurements for which such calculation is not equitable or reasonably
practicable will be disregarded and the percentage of the bonus
otherwise allocated thereto under the terms hereof will be reallocated
in even percentages to the sales and earnings components of the bonus
calculation. After determining the full year bonus based on the extent
to which the aforesaid quarterly targets have been achieved, the amount
of the full year bonus will be prorated by multiplying the same by a
fraction the numerator of which is the number of days between the
beginning of the fiscal year and the date of the Change of Control event
and the denominator of which would be 365. The determination of the
amount of any bonus payable under this paragraph to the Chairman,
President & Chief Executive Officer shall be made by the Organization
and Compensation Committee and for all other participants the
determination of the amount of any bonus payable shall be made by the
Chairman, President & Chief Executive Officer and in each instance the
determination shall be final and binding on the Company and all
participants.
G. In the event of any material, unusual and non-recurring charge to
income purchase or sale of any material business unit by the Company, or
other material event affecting the ability of the participants to
achieve the performance targets established under this Plan, the
Organization and Compensation Committee shall review such performance
targets and make such adjustments with respect thereto as it deems
reasonable and equitable in light of the purposes of this Plan. Any and
all adjustments made by the Organization and Compensation Committee
under this paragraph shall be final and binding on the Company and all
participants.
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H. The Organization and Compensation Committee may in its discretion
terminate the Plan as of the end of any fiscal quarter. If the Plan is
so terminated, the Company shall pay out bonuses to the participants in
such amounts as are appropriate and equitable in light of the Company's
and participants' performance through the end of such quarter and the
targets established hereunder. The determination of the amount of any
bonuses payable under this paragraph shall be made by the Organization
and Compensation Committee in line with the objectives set for each
participant, and its determination shall be final and binding on the
Company and all participants.
I. The personal objectives referred to herein and the application of
certain provisions hereof are described in the FY00 Scorecard prepared
by the Senior Vice President, Human Resources.
J. This Plan shall be effective commencing June 28, 1999.
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