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BRK BRANDS, INC.
1995 MANAGEMENT INCENTIVE BONUS PROGRAM
I. PURPOSE
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The BRK Brands, Inc. 1995 Management Incentive Bonus Program (called the
"Program") is established to give employees of the Company a special
individual incentive to further the profits and growth of the Company. This
Program shall be effective only for the fiscal year beginning January 1,
1995, and ending December 31, 1995. The Company may, at any time, amend,
suspend, or terminate the Program.
II. DEFINITIONS
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2.1 "Company" means BRK Brands, Inc.
2.2 "Bonus" means the sum of the Non-Discretionary Bonus and the
Discretionary Bonus to a Participant under the Program each year.
2.3 "Participant" means an employee selected to participate in the
Program.
2.4 "Level of Participation" means the maximum percentage level at which a
Participant participates in the Program.
2.5 "Earnings per Share" (EPS) means the consolidated net income of First
Alert, Inc. for the fiscal year divided by the weighted average of the
fully diluted common stock outstanding as determined in accordance
with generally accepted accounting principles.
2.6 "Percentage Weight" means the percentage of importance assigned to
earnings per share for the determination of the Non-Discretionary
Bonus and to personal performance for the determination of the
Discretionary Bonus respectively. The sum of the Percentage Weights
shall equal 100%.
2.7 "Hire Date" means the date on which a Participant commences his/her
employment with the Company.
2.8 "Termination Date" means the date on which a Participant terminates
his/her employment with the Company.
III. ELIGIBILITY AND PARTICIPATION
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3.1 Separate programs have been established by the Board of Directors for
the Chairman/CEO and the President/COO, therefore they are excluded
from this program.
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3.2 Employees eligible for Bonuses under the Program will be limited to
those employees of the Company who, in the judgment and discretion of
the Company, are deemed to be in a position to have a major impact on
the profits and growth of the Company. Notwithstanding an employee's
salary grade, participation and maximum level of participation shall
be determined at the sole discretion of the Company.
3.3 A Participant's Level of Participation shall not exceed the following
unless otherwise determined by the Board of Directors:
Management Maximum Level
Group of Participation
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1 - Vice President 30%
2 - Operating Unit General Manager 25%
3 - Functional Area Department 20%
Director/Manager
4 - First-level Manager 10%
A Participant's Level of Participation times his/her base salary on June 1,
1995, represents the maximum Bonus ("Maximum Bonus") a Participant may
receive in any year.
3.3 Participants employed by January 1 of the Program year are eligible
for full-year participation.
3.4 Participants employed after January 1 but prior to October 1 are
eligible on the first day of the quarter following their Hire Date.
Any earned Bonus will be calculated on a pro rata basis.
3.5 Employees newly employed in or promoted to a position with bonus
eligibility between October 1 and December 31 of the Program year are
not eligible to participate in the Program until the following year.
IV. ADMINISTRATION OF THE PROGRAM
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4.1 The Board of Directors will have full and final authority to
prescribe, amend and rescind rules and regulations relating to the
administration of the Program; to interpret the Program and the rules
and regulations applicable thereto; and to make
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all other determinations deemed necessary or advisable for the
administration of the Program. Such administrative action will be
conclusive and binding on all parties at interest.
4.2 The Company has selected Participants, determined the minimum, target,
and maximum earnings per share results, the Percentage Weights and
each Participant's Level of Participation, and will notify each
Participant of the foregoing,
V. BONUS DETERMINATION
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5.1 NON-DISCRETIONARY BONUS
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The percentage weight for the Non-discretionary Bonus shall be 66
2/3%. The Non-discretionary Bonus shall be the product of the maximum
level of participation, times the percentage weight, times earnings
per share attainment percentage.
EPS attainment is expressed as a percentage based on the audited EPS
of First Alert, Inc.
For fiscal year 1995, EPS attainment is:
0% = $0.78 per share or less
50% = $0.89 per share
100% = $1.00 per share or greater
If earnings per share attainment falls between the minimum and the
maximum figures, the earnings per share attainment shall be computed
on a straight-line basis between the minimum and the maximum earnings
per share.
5.2 DISCRETIONARY BONUS
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5.2.1. At the Company's discretion, each Participant may receive a bonus
("Discretionary Bonus") based upon his/her individual performance
for the year.
5.2.2. A Discretionary Bonus pool will be determined from which individual
Discretionary Bonuses will be paid. The Discretionary Bonus pool
will equal 50% of the aggregate Non-discretionary Bonuses paid with
respect to the program year less any Non-discretionary Bonuses paid
to the Company
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Chairman and to any Program Participant whose employment with the
Company terminated for any reason during the program year.
The Discretionary Bonus pool will be allocated to each Vice
President on the basis of Program Participants within his/her
area of responsibility. Each Vice President will recommend the
Discretionary Bonus, if any, to be paid to the Program
Participants in his/her area of responsibility, subject to review
of the President and approval of the Board of Directors. The
total of such Discretionary Bonus recommendations will not exceed
the allocated amount.
VI. MINIMUM BONUS
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If the minimum earnings per share figure is achieved, a total
Non-discretionary Bonus of at least $500 will be awarded to each
full-year Participant. Conversely, if the minimum EPS figure is not
achieved, no Non-discretionary nor Discretionary Bonuses will he paid.
VII. DISTRIBUTION OF BONUS
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Bonuses shall be distributed to each Participant in a lump sum as
soon as practicable after the audit of the Company's financial
statements is completed.
VIII. TERMINATION OF EMPLOYMENT
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A Participant who leaves the employ of the Company either by
mutual consent or by the action of the Company, except for
cause*, before distribution of the Bonus, shall be entitled to
receive a pro rata Non-discretionary Bonus only for his/her
period of employment during the calendar year up to and including
the Participant's Termination Date, and shall not be entitled to
a Discretionary Bonus.
A Participant who voluntarily leaves the employ of the Company
during the Program year shall forfeit any right to both
Non-Discretionary and Discretionary Bonuses.
A Participant who voluntarily leaves the employ of the Company
after the Program year but before the distribution of the Bonus
shall forfeit any right to any Discretionary Bonus.
*Termination for cause includes but is not limited to failure of
the Participant to perform his/her duties faithfully, diligently,
and competently for reasons other than serious physical
disability or other incapacity; theft of Company property or
property of other employees; other criminal conduct; deliberate
destruction of or damage to Company property; excessive
absenteeism or tardiness; fighting during working hours or on
Company property; falsification of records; refusal to follow
directions of
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supervision; bringing firearms or other dangerous weapons,
alcoholic beverages, drugs or narcotics onto Company premises;
reporting to work under the influence of alcohol or drugs;
drinking alcoholic beverages during working hours or on Company
premises; possessing, selling, or offering for sale drugs or
narcotics on Company premises; repeated or willful violation of
Company rules.
IX. AMENDMENT, SUSPENSION, OR TERMINATION OF THE PROGRAM
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9.1 The Company may, at any time, amend, suspend, or terminate the
Program.
9.2 An employee selected to be a Participant in any year may be
removed as a Participant during that year if he/she is demoted to
a position that, in the opinion of the Board of Directors, does
not qualify for participation in the Program.
X. FUNDING OF PROGRAM
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The Bonuses to be granted under the Program constitute general claims
against the Company. Such Bonuses will not be funded through a trust or
special segregated assets of the Company.
XI. NON-ASSIGNABILITY
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A Participant's Bonus under the Program shall not (otherwise than by will
or the laws cf descent and distribution) be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
or charge, and any attempt to so anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be null and void; nor
shall any such Bonus be liable for, or subject to, the debts, contracts,
liabilities or torts of the Participant (or his/her beneficiary) entitled
to such Bonus.
XII. RIGHTS TO CONTINUED EMPLOYMENT
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The Program shall not in any way grant any rights to any Participant to
his/her continued employment by the Company and the Company shall maintain
any rights it might otherwise have to terminate the employment of any
Participant.
XIII. EFFECTIVE DATE
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This Program shall be effective only for the fiscal year beginning
January 1, 1995, and ending December 31, 1995.
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XIV. EFFECT ON BENEFIT PLANS
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10.1 The payment of Bonuses to a Participant actively employed at the time
of payment under the terms of the Program will be considered
compensation for the purpose of determining benefits available under
the Company's Pension Program, Retirement Savings Program, or any
other employee benefit Program or program.
10.2 Payments made after a Participant's employment termination date or
retirement date will not be considered compensation under the Pension
Program, Retirement Savings Program, or any other employee benefit
plan or program.
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