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EXHIBIT 10.4
METAMOR WORLDWIDE, INC.
EXECUTIVE INCENTIVE PLAN
1. ESTABLISHMENT.
1.1 ESTABLISHMENT OF THE PLAN. Metamor Worldwide, Inc.
("Company"), a Delaware corporation, hereby establishes this incentive plan for
executives. The Plan, including any amendments which may be made from time to
time, shall be known as the Metamor Worldwide, Inc. Executive Incentive Plan
("Plan").
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to provide
its participants with incentive awards to the extent they have contributed to
the Company's success, through an ongoing program designed to reinforce the
Company's financial and operating objectives.
1.3 EFFECTIVE DATE OF THE PLAN. The Plan shall be effective as
of January 1, 1998, subject to the final approval of the Plan by the Company's
stockholders.
2. DEFINITIONS AND CONSTRUCTION.
2.1 DEFINITIONS. Whenever used as a capitalized term in the
Plan, the following terms shall have the respective meanings set forth below,
unless otherwise expressly provided:
(i) "EIP Award" means the annual incentive plan award approved
by the Compensation Committee for an eligible participant for a
particular Plan Year.
(ii) "EIP Award Guidelines" mean the standards, targets,
performance measurement and evaluation criteria and guidelines to be
used to determine EIP Awards for a particular Plan Year.
(iii) "Beneficiary" means the person, persons or trust
designated by a Participant as provided in Section 8.2.
(iv) "Code" means the Internal Revenue Code of 1986, as
amended, and the regulations issued thereunder, as the same may be
amended from time to time.
(v) "Company" means Metamor Worldwide, Inc., or any successor
thereto.
(vi) "Committee" means the Compensation Committee of the Board
of Directors. The Compensation Committee shall be comprised solely of
two or more "outside directors" (within the meaning of Section 162(m)
of the Code) designated by the Board of Directors, and shall serve at
the pleasure of the Board.
(vii) "Employee" means an individual who is an employee of the
Company.
(viii) "Participant" means an Employee of the Company who has
been designated as a Participant under the Plan, as provided in Section
3.1.
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(ix) "Plan" means the "Metamor Worldwide, Inc. Executive
Incentive Plan" as set forth in this document, and as it may be amended
from time to time.
(x) "Plan Year" means the 12 month period beginning on the
first day of the Company's fiscal year and ending on the last day of
such fiscal year.
2.2 GENDER AND NUMBER; HEADINGS. Except when otherwise
indicated by the context, any masculine terminology when used in this Plan shall
also include the feminine gender, and the definition of any term in the singular
shall also include the plural. Headings of Articles and Sections herein are
included solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.
3. PARTICIPATION.
3.1 PARTICIPATION. Eligibility for participation is limited to
the Chief Executive Officer, Corporate Officers, and other key management
employees. The Compensation Committee shall designate the Employees of the
Company who are to be the Participants under this Plan. Such designations may be
based on participation criteria established by the Compensation Committee from
time to time. The designation of participants shall be made for each Plan Year,
and the participants designated for a particular Plan Year may be identified by
reference to the subject Plan Year (e.g., the participants designated for the
1998 Plan Year may be referred to as "1998 Participants").
The Compensation Committee may establish such procedures as it deems appropriate
for notifying each participant of his status as a participant under the Plan.
4. ADMINISTRATION OF THE PLAN.
4.1 ANNUAL EIP GUIDELINES. For each Plan Year, the
Compensation Committee shall establish the EIP Guidelines for that Plan Year.
Such EIP Guidelines for the particular Plan Year shall consist of such
performance targets, performance ranges, performance measurements and evaluation
criteria and guidelines as the Compensation Committee determines to be
applicable in awarding EIP Awards for the relevant Plan Year, all of which shall
collectively be known as the "EIP Award Guidelines" for that Plan Year. The EIP
Award Guidelines established for a particular Plan Year may include any of the
following elements, as determined in the sole discretion of the Compensation
Committee.
(i) An incentive award target for each participant, expressed
as a percent of base salary, for purposes of determining the dollar
amount which shall be available for EIP Awards and other benefits under
the Plan for the Plan Year;
(ii) Financial, strategic, project, and/or individual
performance goals for each participant;
(iii) Performance measurement and goal weighting criteria and
guidelines for each participant, where applicable;
(iv) Individual target, minimum, and maximum incentive
opportunities for participants or groups of participants, including
accompanying performance ranges, where applicable;
(v) Guidelines and requirements for the development and
approval of performance measures and objectives; and
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(vi) Such other standards, criteria, measurements,
requirements and guidelines as the Compensation Committee may from time
to time determine shall be applicable with respect to the subject Plan
Year.
The EIP Guidelines so established for each Plan Year shall be communicated to
participants and such other Company personnel as the Compensation Committee
deems necessary to assist in the maintenance of the Plan for such Plan Year. The
EIP Guidelines for each Plan Year (including the EIP Award Guidelines included
therein) shall be maintained with the records of the Plan for reference
purposes.
4.2 CONDITIONS. Notwithstanding any other provision of this
Plan to the contrary, any EIP Awards and other benefits paid to Participants
under this Plan shall be subject to the following conditions:
(i) All EIP Guidelines or other performance measures, goals,
standards, formulas, or criteria relating to Participants ("Performance
measures") for a Plan Year shall be established by the Compensation
Committee in writing within 90 days of the beginning of the Plan Year
provided that the outcome of the performance measures is substantially
uncertain at the time established by the Compensation Committee.
Performance measures may be based on one or more of the following
business criteria, and may be related to Corporate, divisional, or
subsidiary performance: earnings before interest and taxes (EBIT),
sales, sales growth, operating profit, net income, economic profit,
earnings per share, return on equity, cash flow, earnings multiple,
cash flow multiple, total shareholder return, stock price.
(ii) The award and payment of any EIP Award or other benefit
under this Plan to a Participant with respect to a Plan Year shall be
contingent upon the attainment of the applicable performance measures.
The Compensation Committee shall certify in writing prior to the
payment of any such EIP Award that such applicable performance measures
relating to the EIP Award were satisfied. Approved minutes of a meeting
of the Compensation Committee may be used for this purpose.
(iii) The maximum EIP Award or other benefit that may be paid
to any Participant under the Plan for any Plan Year is $2,500,000.
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(iv) The Committee has the authority to reduce the amount of
or eliminate any incentive otherwise payable under the EIP Guidelines,
although it does not have the authority to increase the amount of an
incentive award as determined pursuant to the EIP Guidelines.
(v) All EIP Awards or other benefits to Participants under the
Plan shall be further subject to such other conditions, restrictions,
and requirements as the Compensation Committee may determine to be
necessary to carry out the purposes of this Section 4.
4.3 COMPENSATION COMMITTEE. The Plan shall be administered by
the Compensation Committee. The Compensation Committee shall have the full
power, authority and discretion to administer the Plan and construe, interpret
and apply its provisions. Without limiting the generality thereof, the
Compensation Committee shall have the following powers, duties and authorities
as regards its administration and activities as regards the Plan:
(i) To establish EIP Guidelines for each Plan Year;
(ii) To approve EIP Awards or other benefit payments for
participants for each Plan Year;
(iii) To establish, maintain, and interpret such rules,
regulations and requirements as it deems necessary or advisable as
regards the administration and maintenance of the Plan, including the
amendment and modification of such rules, regulations and requirements;
(iv) To resolve all questions relating to the eligibility of
participants;
(v) To resolve all questions relating to a Participant's right
to receive any EIP Award payment or other benefits under the Plan;
(vi) To determine the time, manner and form of payment with
respect to any EIP Award payments or other benefits under the Plan;
(vii) To engage any administrative, legal, consulting,
clerical or other services it deems appropriate in administering the
Plan;
(viii) To construe and interpret the Plan, and any
administrative rules relating thereto, as necessary and to carry out
the purposes of the Plan;
(ix) To resolve any questions or make any determinations
relating to the administration of the Plan;
(x) To compile and maintain all records it determines to be
necessary, appropriate and convenient in connection with the
administration of the Plan;
(xi) To delegate or appoint such other parties as it
determines to be necessary to carry out a general or specific function
as regards the administration of the Plan; and
(xii) To take all such other actions, and to make such
determinations, as are necessary to administer the Plan and carry out
its purposes.
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All actions taken or determinations made by the Compensation Committee as
regards the Plan shall be final, binding and conclusive upon all parties
4.4 EXPENSES. Any expenses relating to the administration of
this Plan shall be borne by the Company.
4.5 INDEMNIFICATION AND EXCULPATION. The members of the
Compensation Committee, its agents or representatives, and Employees of the
Company shall be indemnified and held harmless by the Company against and from
any and all loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by them in connection with or resulting from any claim,
action, suit, or proceeding to which they may be a party or in which they may be
involved by reason of any action taken or failure to act under this Plan and
against and from any and all amounts paid by them in settlement (with the
Company's written approval) or paid by them in satisfaction of a judgment in any
such action, suit, or proceeding. The foregoing provision shall not be
applicable to any person if the loss, cost, liability, or expense is due to such
person's gross negligence or willful misconduct.
5. EIP AWARDS AND PAYMENT OF AWARDS.
5.1 ELIGIBILITY FOR EIP AWARD PAYMENTS. To be eligible to
receive any EIP Award payment as may be approved for the participant for a
particular Plan Year, as provided in Section 5.1, such participant must satisfy
one of the following eligibility conditions:
(i) He must be employed by the Company on the first and last
day of the Plan Year and experience no break in service; or
(ii) He must have retired, died or incurred a long-term
disability (rendering the Employee unable to perform the duties
associated with their position within the Company) during the Plan Year
if he is not employed as an Employee on the last day of the Plan Year;
Unless the Compensation Committee otherwise specifically provides, a participant
who does not meet one of the foregoing employment eligibility conditions for a
particular Plan Year shall not be eligible to receive payment of an EIP Award
for such Plan Year.
5.2 TIME AND FORM OF PAYMENT. All EIP Awards for a particular
Plan Year shall be paid to or with respect to the eligible participants for such
Plan Year at such time or times as the Compensation Committee may determine by
applying the EIP Guidelines after the close of the Plan Year, upon the
availability of audited financial statements. Normally, all EIP Award payments
shall be in a single lump sum; however, the Compensation Committee may from time
to time direct the payment of any EIP Award in a different payment form or a
stream of payments upon written notification to Plan participants. The
Compensation Committee shall designate whether an EIP Award is to be paid in
cash, other forms of property or benefit, or any combination thereof.
5.3 VOLUNTARY DEFERRAL OF AWARD. A Participant may elect to
defer payment of his EIP Award if deferral of an award under the Plan is
permitted pursuant to the terms of a deferred compensation program of the
Company existing at the time the election to defer is permitted to be made, and
if the Participant complies with the terms of such program.
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5.4 DEATH OF PARTICIPANT. In the event a participant who is
eligible to receive an EIP Award dies before payment thereof is made to him, the
payment of such EIP Award shall be made to his designated Beneficiary at the
same time and in the same form as other participants.
6. FUNDING OF THE PLAN.
6.1 FUNDING. All amounts paid under this Plan shall be paid
from the general assets of the Company. EIP Award payments and other benefit
payments under this Plan shall be reflected on the accounting records of the
Company, but neither this Plan nor the maintenance of such accounting records
shall be construed to create, or require the creation of, a trust, custodial
account, or escrow account with respect to any participant. No participant shall
have any right, title, or interest whatsoever in or to any investment reserves,
accounts, or funds, that the Employees may purchase, establish, or accumulate to
aid in providing the unfunded EIP Award payments or other benefits described in
the Plan.
Nothing contained in this Plan, and no action taken pursuant to its provisions,
shall create, or be construed to create, a trust or fiduciary relationship of
any kind between an Employer, the Compensation Committee and a participant or
any other person. Participants shall not acquire any interest under the Plan
greater than that of an unsecured general creditor of an Employer.
7. MERGER; AMENDMENT; TERMINATION.
7.1 MERGER, CONSOLIDATION, OR ACQUISITION. In the event of a
merger, consolidation, or acquisition where the Company is not the surviving
organization, unless the successor or acquiring organization shall elect to
continue and carry on the Plan, this Plan shall terminate with respect to the
Company, and no additional benefits shall accrue for the participants of the
Company. Unpaid EIP Award payments or other benefits shall continue to be paid
as scheduled unless the Company or acquiring organization elects to accelerate
payment.
7.2 TERMINATION. The Compensation Committee may terminate this
Plan at any time, for any reason, and in any manner. In the event of the
termination of the Plan, no further EIP Award payments or other benefits shall
accrue under this Plan, and amounts which are then payable with respect to a
prior Plan Year shall continue to be an obligation of the Company and shall be
paid as scheduled. No EIP Award payments or other payments shall be made with
respect to the Plan Year in which the Plan is terminated, unless otherwise
provided by the Compensation Committee.
8. SPECIAL PROVISIONS.
8.1 NONALIENATION. No EIP Award or other benefit payable at
any time under the Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, attachment, garnishment, or encumbrance of any
kind, and shall not be subject to or reached by any legal or equitable process
(including execution, garnishment, attachment, pledge, or bankruptcy) in
satisfaction of any debt, liability, or obligation, prior to receipt. Any
attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any
such benefit, whether presently or thereafter payable, shall be void.
Notwithstanding the foregoing provisions of this Section 8.1, no EIP Award or
other benefit amount payable under the Plan shall be payable until and unless
any and all amounts representing debts or other obligations owed to the Company
by the participant with respect to whom such amount would otherwise be payable
shall have been fully paid.
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8.2 BENEFICIARY DESIGNATION. A participant may designate a
Beneficiary who upon his death is to receive a EIP Award payment that otherwise
would have been paid to him under the Plan. All Beneficiary designations shall
be in writing and on a form approved by the Compensation Committee for such
purpose, and any such designation shall only be effective if and when delivered
to the Compensation Committee or its representative during the lifetime of the
participant. Absent any specific Beneficiary designation with respect to this
Plan, a Participant's designated Beneficiary for purposes of this Plan shall be
the same person or persons as designated as his beneficiary to receive life
insurance proceeds under the employer's group term life insurance coverage for
such participant. In the event there is not a Beneficiary designated on file for
the participant, such Participant's Beneficiary shall be deemed to be the
Participant's surviving spouse, or if there is no such spouse, the Participant's
estate.
8.3 EFFECT ON OTHER BENEFIT PLANS. EIP Awards or other benefit
amounts paid under this Plan shall only be considered as compensation under the
Employee benefit plans of the Company as determined and provided under the
provisions of such plans.
8.4 COMPANY-EMPLOYEE RELATIONSHIP. The establishment of this
Plan shall not be construed as conferring any legal or other rights upon any
Employee or any person for a continuation of employment, nor shall it interfere
with the rights of the Company to discharge any Employee or otherwise act with
relation to the Employee. The Company may take any action (including discharge)
with respect to any Employee or other person and may treat such person without
regard to the effect which such action or treatment might have upon such person
as a Participant under this Plan.
8.5 INCOMPETENCE. Every person receiving or claiming a EIP
Award or other benefit payments under the Plan shall be conclusively presumed to
be mentally competent until the date on which the Compensation Committee
receives a written notice, in a form and manner acceptable to the Compensation
Committee, that such person is incompetent, and that a guardian, conservator, or
other person legally vested with care of such person or person's estate has been
appointed; provided, however, that if the Compensation Committee shall find that
any person to whom a EIP Award or other benefit payment is payable under the
Plan is unable to care for such person's affairs because of incompetence, any
payment due (unless a prior claim therefore shall have been made by a duly
appointed legal representative) may be paid in a manner as approved by the
Compensation Committee. Any such payment so made shall be a complete discharge
of any liability therefore under the Plan.
8.6 BINDING ON THE COMPANY, PARTICIPANTS AND THEIR SUCCESSORS.
This Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns and the participants, their heirs, executors,
administrators and legal representatives.
8.7 STATUS UNDER ERISA. This Plan is not maintained as and is
not intended to be an "Employee benefit plan" under the Employee Retirement
Income Security Act of 1974, as amended.
8.8 TAX LIABILITY. The Company may withhold from any payment
thereunder any taxes required to be withheld and such sum as the Company may
reasonably estimate to be necessary to cover any taxes for which the Company may
be liable and which may be assessed with regard to such payment.
8.9 SEVERABILITY. In the event any provision of this Plan
shall be held invalid or illegal for any reason, any illegality or invalidity
shall not affect the remaining parts of this Plan, but this Plan shall be
construed and enforced as if the illegal or invalid provision had never been
inserted,
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and the Company shall have the privilege and opportunity to correct and remedy
such questions of illegality or invalidity by amendment as provided in this
Plan.
8.10 APPLICABLE LAW. This Plan shall be governed by,
construed, and administered in accordance with the laws of the State of Texas,
except to the extent such laws are preempted by the laws of the United States.