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EXHIBIT 10.2
As Amended and Restated
By EG&G Board of Directors
on December 17, 1997
EG&G, INC.
EVA INCENTIVE PLAN
ARTICLE I
STATEMENT OF PURPOSE
1.1 The purpose of the EVA Incentive Plan (the "Plan") is to provide a
system of incentive compensation which will promote the maximization of
Economic Value Added ("EVA") over the long term. In order to align
management incentives with shareholder interests, incentive
compensation will reward the creation of value. This Plan will tie
incentive compensation to EVA and thereby reward management for
creating value.
1.2 EVA is the performance measure of value creation for EG&G, Inc. (the
"Company"). Managers create value when they employ capital in an
endeavor that generates a return that exceeds the cost of the capital
employed. Managers lose value when they employ capital in an endeavor
that generates a return that is less than the cost of capital employed.
EVA measures the total value created (or lost) by management by
subtracting the cost of capital employed from the operating profit
after tax generated by an EVA Business Unit, as hereinafter defined.
ARTICLE II
DEFINITIONS
Unless the context provides a different meaning, the following terms shall have
the following meanings:
"Act" means the Securities Exchange Act of 1934, as amended.
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"Actual EVA" means, with respect to an EVA Business Unit for a fiscal year, the
EVA of such EVA Business Unit for such year as determined by the Chief Financial
Officer with the concurrence of the Committee.
"Code" means the Internal Revenue Code of 1986, as amended.
"Capital" means, with respect to an EVA Business Unit for a fiscal year, the
investment made in such EVA Business Unit, as determined by the Chief Financial
Officer with the concurrence of the Committee for such year. Each component of
Capital will be measured by computing an average balance based on the ending
monthly balance for the twelve months of a fiscal year.
"Capital Charge" means, with respect to an EVA Business Unit for a fiscal year,
the deemed opportunity cost of employing Capital in the business of such EVA
Business Unit for such year. The Capital Charge is computed as follows:
Capital Charge ' Capital x Cost of Capital
"Cause" shall have the meaning set forth in the personnel policies for the EVA
Business Unit by which a Participant is employed at the time of termination.
Notwithstanding the foregoing, in the event of a Change of Control, "Cause"
shall mean:
(i) misappropriating any funds or property of the EVA Business
Unit;
(ii) unreasonable refusal to perform the duties assigned to the
Participant;
(iii) conviction of a felony;
(iv) continuous conduct bringing notoriety to the EVA Business Unit
and having an adverse effect on the name or public image of
the EVA Business Unit; or
(v) continued failure by the Participant to observe any provisions
of any written employment contract with the EVA Business Unit
after being informed of such breach.
"Change in Control" means that any of the following events shall occur or be
deemed to have occurred:
(i) any "person", as such term is used in Section 13(d) and 14(d) of the
Act (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any
corporation owned directly or indirectly by the stockholders of the
Company in substantially the same
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proportion as their ownership of stock in the Company), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 30%
or more of the combined voting power of the Company's then outstanding
securities;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the
Company, and any new director whose election by the Board of Directors
or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then still in office
who were either directors at the beginning of the period or whose
election or whose nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board of
Directors;
(iii) the stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation; or
(iv) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
"Chief Executive Officer" means the Chief Executive Officer of the Company as
designated by the Board of Directors of the Company from time to time.
"Chief Financial Officer" means the Chief Financial Officer of the Company as
designated by the Board of Directors of the Company from time to time.
"Committee" means the Compensation and Stock Option Committee of the Board of
Directors of the Company or such other committee as such Board may designate
from time to time.
"Company" means EG&G, Inc., a Massachusetts corporation, and its successors and
assigns, including any corporation with which the Company is merged or
consolidated.
"Cost of Capital" means for a fiscal year the weighted average of the after-tax
cost of debt and the cost of equity for such year, as determined by the Chief
Financial Officer with the concurrence of the Committee.
"Declared Incentive" means, with respect to a Participant for a fiscal year, the
product of the Initial Declared Incentive multiplied by the Individual
Performance Factor, if any.
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"EVA" means, with respect to an EVA Business Unit for a fiscal year, the NOPAT
of such EVA Business Unit for such year minus the Capital Charge of such EVA
Business Unit for such year, all as determined by the Chief Financial Officer
with the concurrence of the Committee. EVA may be positive or negative.
"EVA Business Unit" means a business unit or group of business units, including
the Company, that are uniquely identified for the purpose of calculating EVA.
"Expected Improvement in EVA" means the constant EVA improvement that is added
to shift the target up each year as determined by the Company from time to time.
This is determined by the expected growth in EVA per year with respect to an EVA
Business Unit.
"Executive Officer" means a corporate officer of the Company elected by the
Board of Directors of the Company.
"First Negative Year" means with respect to Highly-Compensated and Non-Highly
Compensated Employees, the first year in an unbroken series of one or more such
consecutive years in which both the Reserve Balance and the Declared Incentive
are negative. If a year or series of years in which both the Reserve Balance and
the Declared Incentive are negative is followed by a year or years in which
either both the Reserve Balance and the Declared Incentive are positive or the
Reserve Balance is negative and the Declared Incentive is positive, a new "First
Negative Year" shall be deemed to have occurred the next time there is a year in
which both the Reserve Balance and the Declared Incentive are negative.
"Incentive Multiple" means, with respect to an EVA Business Unit for a fiscal
year, [(the Actual EVA minus the Target EVA) divided by the Leverage Factor]
plus 1.0.
"Incentive Reserve For Highly-Compensated Employees" means, with respect to a
Participant who is either an Executive Officer of the Company, a general manager
of an EVA Business Unit, or a highly compensated employee as determined from
time to time by the Committee, a bookkeeping record of an account to which any
portion of the Declared Incentive remaining after current year distribution to
the Participant is credited, or debited as the case may be, from time to time
under the Plan, and from which distribution amounts not covered by the Declared
Incentive are debited.
"Individual Performance Factor" means, with respect to a Participant, the
addition or subtraction of up to 25% of the Declared Incentive adjusted to
reflect individual job performance for the fiscal year. The Individual
Performance Factor may be utilized at the discretion of the manager of an EVA
Business Unit provided that the total accrued incentive for the EVA Business
Unit does not increase or decrease as a result of the utilization of the
Individual Performance Factor.
"Initial Declared Incentive" means, with respect to a Participant for a fiscal
year, the product of the Target Incentive multiplied by the Incentive Multiple.
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"Leverage Factor" means, with respect to an EVA Business Unit for a fiscal year,
the negative (positive) deviation from Target EVA necessary before a zero (two
times) Target Incentive is earned as determined by the Committee from time to
time.
"Incentive Reserve For Non-Highly Compensated Employees" means, with respect to
employees not subject to the Incentive Reserve For Highly-Compensated Employees,
a bookkeeping record of an account to which only negative Declared Incentives
are credited from time to time under the Plan and against which any positive
incentive payments are offset in determining any current distribution.
"Reserve Balance For Non-Highly Compensated Employees" means, with respect to a
Participant subject to the Incentive Reserve For Non-Highly Compensated
Employees, a bookkeeping record of the net balance following the end of each
fiscal year of the negative amounts , if any, credited against such
Participant's Incentive Reserve For Non-Highly Compensated Employees as offset
by any positive Declared Incentives. The Reserve Balance For Non-Highly
Compensated Employees shall always be zero or a number less than zero.
"NOPAT " means, with respect to an EVA Business Unit for a fiscal year, the net
operating profit after taxes for such fiscal year, as determined by the Chief
Financial Officer with the concurrence of the Committee.
"Participant" means, for a fiscal year, each salaried employee who is designated
as a Participant, in the case of Executive Officers of the Company, by the
Committee, and in all other cases, by the Chief Executive Officer or his
designee.
"Plan" means this EG&G, Inc. EVA Incentive Plan, as amended from time to time.
"Reserve Balance For Highly-Compensated Employees" means, with respect to a
Participant subject to the Incentive Reserve For Highly-Compensated Employees, a
bookkeeping record of the net balance of the amounts credited to and debited
against such Participant's Incentive Reserve For Highly-Compensated Employees
following the end of each fiscal year. For a Participant's first year of
participation in the Plan, such Participant's Reserve Balance For
Highly-Compensated Employees shall initially be equal to zero.
"Target EVA" means, with respect to an EVA Business Unit for the initial year
that such EVA Business Unit is subject to the Plan, the level of EVA as
determined by the Company.
After the initial year that an EVA Business Unit is subject to the Plan, the
Target EVA for such EVA Business Unit for each succeeding fiscal year shall be
revised according to the following formula:
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Target EVA = [(Prior Fiscal Year's Actual EVA + Prior Fiscal
Year's Target EVA) divided by 2] + Expected
Improvement in EVA
"Target Incentive" means, with respect to a Participant for a fiscal year, the
Target Incentive for such Participant for such fiscal year as determined by the
Committee in the case of Participants who are Executive Officers of the Company
at the time of determination, and, in all other cases, by the Chief Executive
Officer or his designee.
ARTICLE III
DETERMINATIONS AND DISTRIBUTION OF INCENTIVES
3.1 DETERMINATIONS. For each fiscal year of the Company beginning with the
1995 fiscal year, the Company shall determine with respect to such
fiscal year:
(1) the persons who will be Participants;
(2) the EVA Business Unit
or Units for each such Participant and the weighting between or
among said Units;
(3) the Target Incentive for each Participant;
(4) the minimum and maximum ranges for the Individual Performance
Factors; and
(5) the Target EVA, Leverage Factor, and Expected
Improvement in EVA for each EVA Business Unit.
As soon as practicable following the close of such fiscal year, the
Company shall determine the following with respect to such fiscal year
for each Participant:
(1) the Actual EVA for each EVA Business Unit;
(2) the Incentive Multiple by EVA Business Unit;
(3) the Individual Performance Factors, if any;
(4) the Initial Declared Incentive; and (5) the Declared
Incentive.
3.2 DISTRIBUTION.
A. As soon as practicable following the close of each fiscal year of
the Company, but no later than March 15 following such close, the
Company, with respect to those Participants subject to the
Incentive Reserve For Highly-Compensated Employees, shall:
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(1) Pay out the prescribed distribution first, to the extent
possible, from the Declared Incentive, and then from the Reserve
Balance For Highly-Compensated Employees;
(2) Add the remaining portion, if any, of the Declared Incentive for
such fiscal year (including any negative incentives) to the
Incentive Reserve For Highly-Compensated Employees; and
(3) Carry the remaining Reserve Balance For Highly-Compensated
Employees (positive or negative) forward to the next fiscal year.
The prescribed distribution ratios for the Incentive Reserve For
Highly-Compensated Employees for a Participant are:
First year of the Plan 80%
Second year of the Plan 67%
Third year of the Plan 57%
Fourth and subsequent years of the Plan 50%
All distributions from the Incentive Reserve For Highly-Compensated
Employees shall be made on a last-in, first-out basis, such that the
distribution for any given fiscal year shall come first from the
Declared Incentive for that fiscal year, with any remainder of that
distribution coming from the Reserve Balance For Highly-Compensated
Employees attributable to years prior to the fiscal year for which the
current distribution is being made.
B. As soon as practicable following the close of each fiscal year of
the Company, but no later than March 15 following such close, the
Company shall pay the Declared Incentive as offset by the Reserve
Balance For Non-Highly Compensated Employees as of the close of
the fiscal year, but before considering the Declared Incentive,
to those Participants subject to the Incentive Reserve For
Non-Highly Compensated Employees.
3.3 NEGATIVE RESERVE BALANCE.
(a) If, as a result of a negative EVA, a Reserve Balance For
Highly-Compensated Employees, or a Reserve Balance For Non-Highly
Compensated Employees has a deficit, no Participant shall be required,
at any time, to make a cash reimbursement to his or her Incentive
Reserve For Highly-Compensated Employees or Incentive Reserve For
Non-Highly Compensated Employees. Except as hereinafter provided such
negative Reserve Balance For Highly-Compensated Employees or Reserve
Balance For Non-Highly Compensated Employees, however, will be carried
forward and will be netted 100% against future Declared Incentives.
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(b) In the event a First Negative Year should occur, for the first year
after such First Negative Year, the negative Reserve Balance of a
Participant shall be 100% netted against the Declared Incentive for that
year. For the second year after such First Negative Year, 50% of any
positive Declared Incentive or 1x the Target Incentive, whichever is
less, shall be paid out to the Participant and the balance of the
Declared Inventive shall be applied to the negative Reserve Balance. The
payout system set forth above for the second year after such First
Negative Year shall continue until the Reserve Balance becomes positive
or until a new First Negative Year occurs, whichever occurs first.
3.4 LUMP SUM. All distributions from the Plan shall be made in a cash lump
sum unless payment is deferred in a timely manner by the Participant
with the consent of the Company under the Company's incentive deferral
policy as in effect from time to time.
3.5 INTEREST. No interest shall be paid on or accrue to any Reserve Balance
For Highly-Compensated Employees.
ARTICLE IV
PLAN MATTERS AND CHANGE IN STATUS
4.1 PLAN MATTERS. The Committee on behalf of the Company shall determine all
Plan matters regarding the Plan with respect to Participants who are
Executive Officers at the time of determination. Unless otherwise
expressly reserved to the Committee, the Chief Executive Officer or his
designee on behalf of the Company shall determine all Plan matters with
respect to all other Participants.
4.2 HIRES, PROMOTIONS AND TRANSFERS. A Participant who is hired, transferred
or promoted during a fiscal year into a position qualifying for
participation in the Plan will participate on a prorated basis in the
year of hire, transfer or promotion based on the percentage of the
fiscal year the Participant is in such qualifying position. A
Participant who transfers his or her employment from one participating
EVA Business Unit to another EVA Business Unit will retain his or her
Incentive Reserve For Highly-Compensated Employees or Incentive Reserve
For Non-Highly Compensated Employees and the Initial Declared Incentive
and Declared Incentive for such Participant shall be pro-rated based on
the time spent in each EVA Business Unit.
4.3 RETIREMENT. A Participant who terminates employment with the Company
during a fiscal year by virtue of retirement at age 55 or older shall be
entitled to receive the positive Reserve Balance For Highly-Compensated
Employees, if any, and may be eligible for a share of the Declared
Incentive. The Declared Incentive shall be
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calculated as if the Participant had remained employed as of the end of
the fiscal year. Participant's share of the Declared Incentive will be
calculated by multiplying the Declared Incentive by a proration factor
equal to the number of full weeks of Participant's actual employment
during the fiscal year divided by fifty-two (52). Eligibility will be
based on the authorization of the Participant's manager and must be
approved at the start of the fiscal year in which the retirement is to
occur. Payment of the positive Reserve Balance For Highly-Compensated
Employees, if any, and Participant's share of any Declared Incentive
will be made at the same time as payments under the Plan are made to
Participants actively employed by the Company.
4.4 DISABILITY. A Participant who becomes permanently disabled, as defined
in the Company's long-term disability benefits program, shall be
entitled to receive the positive Reserve Balance For Highly-Compensated
Employees, if any, and may be eligible for a share of the Declared
Incentive. The Declared Incentive shall be calculated as if the
Participant had remained employed as of the end of the fiscal year.
Participant's share of the Declared Incentive will be calculated by
multiplying the Declared Incentive by a proration factor equal to the
number of full weeks of Participant's actual employment during the
fiscal year divided by fifty-two (52). Eligibility will be based on the
authorization of the Participant's manager. Payment of the positive
Reserve Balance For Highly-Compensated Employees, if any, and
Participant's share of any Declared Incentive will be made at the same
time as payments under the Plan are made to Participants actively
employed by the Company.
4.5 DEATH. If a Participant terminates employment with the Company during a
fiscal year by reason of death, the estate of the Participant shall be
entitled to receive the positive Reserve Balance For Highly-Compensated
Employees, if any, and may be eligible for a share of the Declared
Incentive. The Declared Incentive shall be calculated as if the
Participant had remained employed as of the end of the fiscal year.
Participant's share of the Declared Incentive will be calculated by
multiplying the Declared Incentive by a proration factor equal to the
number of full weeks of Participant's actual employment during the
fiscal year divided by fifty-two (52). Eligibility will be based on the
authorization of the Participant's manager. Payment of the positive
Reserve Balance For Highly-Compensated Employees, if any, and
Participant's share of any Declared Incentive will be made at the same
time as payments under the Plan are made to Participants actively
employed by the Company.
4.6 INVOLUNTARY TERMINATION WITHOUT CAUSE. A Participant whose employment is
terminated by the Company or any subsidiary without Cause shall forfeit
his or her Declared Incentive, Incentive Reserve For Highly-Compensated
Employees and any Reserve Balance For Highly-Compensated Employees
unless a different determination is made by the Company.
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4.7 VOLUNTARY TERMINATION. In the event that a Participant voluntarily
terminates employment with the Company or any of its subsidiaries, the
right of the Participant to his or her Declared Incentive, Incentive
Reserve For Highly-Compensated Employees and any Reserve Balance For
Highly-Compensated Employees shall be forfeited unless a different
determination is made by the Company.
4.8 INVOLUNTARY TERMINATION FOR CAUSE. In the event of termination of
employment for Cause, the right of the Participant to his or her
Declared Incentive, Incentive Reserve For Highly-Compensated Employees
and any Reserve Balance For Highly-Compensated Employees shall be
forfeited unless a different determination is made by the Company.
4.9 BREACH OF AGREEMENT. Notwithstanding any other provision of the Plan or
any other agreement, in the event that a Participant shall breach any
non-competition agreement or provision relating to the Company or breach
any agreement with respect to the post-employment conduct of such
Participant, including those contained in any benefit or incentive plan
or award, the Incentive Reserve For Highly-Compensated Employees held by
such Participant shall be forfeited.
4.10 CHANGE IN CONTROL. Upon a Change in Control, the Plan shall terminate
and positive Reserve Balances For Highly-Compensated Employees shall be
paid to Participants unless the Plan is continued on no less beneficial
terms to the Participants. Payments under this Section 4.10 shall be
made without regard to whether the deductibility of such payments (or
any other "parachute payments," as that term is defined in Section 280G
of the Code, to or for the benefit of the Participant) would be limited
or precluded by Section 280G and without regard to whether such payments
(or any other "parachute payments" as so defined) would subject the
Participant to the federal excise tax levied on certain "excess
parachute payments" under Section 4999 of the Code; provided that if the
total of all "parachute payments" to or for the benefit of the
Participant, after reduction for all federal, state and local taxes
(including the tax described in Section 4999 of the Code, if applicable)
with respect to such payments (the "Total After-Tax Payments"), would be
increased by the limitation or elimination of any payment under this
Section 4.10, amounts payable under this Section 4.10 shall be reduced
to the extent, and only to the extent, necessary to maximize the Total
After-Tax Payments. The determination as to whether and to what extent
payments under this Section 4.10 are required to be reduced in
accordance with the preceding sentence shall be made at the Company's
expense by Arthur Andersen LLP or by such other certified public
accounting firm as the Board of Directors of the Company may designate
prior to a Change in Control of the Company. In the event of any
underpayment or overpayment under this Section 4.10 as determined by
Arthur Andersen LLP (or such other firm as may have been designated in
accordance with the preceding sentence), the amount of such
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underpayment or overpayment shall forthwith be paid to the Participant
or refunded to the Company, as the case may be, with interest at the
applicable federal rate provided for in Section 7872 (f)(2) of the Code.
4.11 NO GUARANTEE. Participation in the Plan is no guarantee that payments
under the Plan will be made or that selection as a Participant will be
made for the subsequent fiscal year.
ARTICLE V
GENERAL PROVISIONS
5.1 WITHHOLDINGS. The Company shall have the right to withhold all amounts,
including but not limited to, taxes, which in the determination of the
Company, are required to be withheld under law with respect to any
amount due or paid under the Plan.
5.2 EXPENSES. All expenses and costs in connection with the adoption and
administration of the Plan shall be borne by the Company out of its
general funds.
5.3 CLAIMS FOR BENEFITS. Participants who terminate service for any reason
will be deemed to have made a claim for benefits and no written claim
will be required. Claims for benefits will be decided by the Chief
Executive Officer or, in the case of a claim pertaining to an Executive
Officer, by the Committee (collectively referred to as the
"Adjudicator"). If the Adjudicator believes that a terminated
Participant is not entitled to benefits, it shall notify the Participant
in writing of the denial of benefits within 90 days of the Participant's
termination of service. In the event that a claim is wholly or partially
denied, the Participant or his representative will receive a written
explanation of the reason for denial. The Participant or his
representative may request a review of the denied claim within 60 days
of receipt of the denial and, in connection therewith, may review
pertinent documents and submit comments in writing. Upon receipt of an
appeal, the Adjudicator shall decide the appeal within 60 days of
receipt. The decision on appeal shall be in writing, shall include
specific reasons for the decision and shall refer to pertinent
provisions of the Plan on which the decision is based. In reaching its
decision, the Adjudicator shall have complete discretionary authority to
determine all questions arising in the interpretation and administration
of the Plan and to construe the terms of the Plan, including any
doubtful or disputed terms and the eligibility of a Participant for
benefits.
5.4 ACTION TAKEN IN GOOD FAITH. The Company may employ attorneys,
consultants, accountants or other persons and the Company's directors
and officers shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or Chief
Executive Officer in good faith shall be final and binding upon all
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employees, the Company and all other interested parties. No member of
the Committee and no officer, director, employee or representative of
the Company, or any of its affiliates acting on behalf of or in
conjunction with the Committee, shall be personally liable for any
action, determination, or interpretation, whether of commission or
omission, taken or made with respect to the Plan.
5.5 RIGHTS PERSONAL TO EMPLOYEES. Any rights provided to an employee under
the Plan shall be personal to such employee, shall not be transferable
(except by will or pursuant to the laws of descent or distribution), and
shall be exercisable during the employee's lifetime, only by such
employee.
5.6 DISTRIBUTION. Upon termination of the Plan or suspension for a period of
more than 90 days, the positive Reserve Balance For Highly-Compensated
Employees of each Participant shall be distributed as soon as
practicable but in no event later than 90 days from such event. The
Committee, in its sole discretion, may accelerate distribution of the
balance of any Incentive Reserve For Highly-Compensated Employees, in
whole or in part, at any time without penalty.
5.7 NON-ALLOCATION OF AWARD. In the event of a suspension or termination of
the Plan during any fiscal year, as provided herein at Section 10.1, the
Declared Incentive for such year shall be deemed forfeited and no
portion thereof shall be allocated to Participants. In the event of a
suspension, any such forfeiture shall not affect the calculation of EVA
in any subsequent year.
ARTICLE VI
LIMITATIONS
6.1 NO CONTINUED EMPLOYMENT. Nothing contained herein shall provide any
employee with any right to continued employment or in any way abridge
the rights of the Company and its subsidiaries to determine the terms
and conditions of employment and whether to terminate employment of any
employee. Neither the establishment of the Plan or the grant of an award
or bonus hereunder shall be deemed to constitute an express or implied
contract of employment for any period of time or in any way abridge the
rights of the Company or any of its subsidiaries to determine the terms
and conditions of employment or to terminate the employment of any
employee with or without Cause at any time.
6.2 NO VESTED RIGHTS. Except as otherwise expressly provided herein, no
employee or other person shall have any claim of right (legal,
equitable, or otherwise) to any award, allocation, or distribution or
any right, title, or vested interest in any amounts in such employee's
Incentive Reserve For Highly-Compensated Employees and no officer or
employee of the Company or any subsidiary or any
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other person shall have any authority to make representations or
agreements to the contrary. No interest conferred herein to a
Participant shall be assignable or subject to any lien or pledge or any
claim by a Participant's creditors. The right of the Participant to
receive a distribution thereunder shall be an unsecured claim against
the general assets of the Company and the Participant shall have no
rights in or against any specific assets of the Company as the result of
participation hereunder.
6.3 NOT PART OF OTHER BENEFITS. The benefits provided in this Plan shall not
be deemed a part of any other benefit provided by the Company or any of
its subsidiaries to its employees. Neither the Company nor any of its
subsidiaries assumes any obligation to Participants except as specified
herein. This is a complete statement of the terms and conditions of the
Plan as in effect on January 1, 1995 and as amended on April 23, 1996.
6.4 OTHER PLANS. Nothing contained herein shall limit the power of either
the Company or its subsidiaries or the power of the Committee to grant
bonuses to employees of the Company or any of its subsidiaries, whether
or not Participants in this Plan.
6.5 UNFUNDED PLAN. This Plan is unfunded. Nothing herein shall create or be
deemed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company (or any of its subsidiaries) and any
Participant.
ARTICLE VII
AUTHORITY
7.1 Full and sole power and authority to interpret and administer this Plan
shall be vested in the Committee which shall have the sole authority to
make rules and regulations for the administration of the Plan. The
Committee may from time to time make such decisions and adopt such rules
and regulations for implementing the Plan as it deems appropriate for
any Participant under the Plan. Any decision taken by the Committee
arising out of or in connection with the construction, administration,
interpretation and effect of the Plan shall be final, conclusive and
binding upon all Participants and any person claiming under or through
them. The Committee may delegate its power and authority with respect to
the Plan to the Chief Executive Officer from time to time as it
determines.
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ARTICLE VIII
NOTICE
8.1 Any notice to be given pursuant to the provisions of the Plan shall be
in writing and directed to the appropriate recipient thereof at his or
her business address or office location.
ARTICLE IX
EFFECTIVE DATE
9.1 This Plan shall be effective as of January 1, 1995.
9.2 The Incentive Reserve For Non-Highly Compensated Employees and the
Reserve Balance For Non-Highly Compensated Employees shall be effective
commencing with the 1996 fiscal year.
ARTICLE X
AMENDMENTS
10.1 This Plan may be amended, suspended or terminated in whole or in part at
any time from time to time at the sole discretion of the Committee;
provided, however, that no such change in the Plan shall be effective to
eliminate or diminish the distribution of any award that has been
allocated to the Incentive Reserve of a Participant prior to the date of
such amendment, suspension or termination. Notice of any such amendment,
suspension or termination shall be given promptly to each Participant.
ARTICLE XI
APPLICABLE LAW
11.1 This Plan shall be construed in accordance with the provisions of the
laws of the Commonwealth of Massachusetts.