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Exhibit 10.6
LONG-RANGE BONUS INCENTIVE PLAN
The plan is established for the benefit of James R. Lavelle and Daniel E.
Jackson and is based directly upon earnings performance over a six-year period.
The provisions of the LBIP are stated herein as follows:
(a) Each of Messrs. Lavelle, Evans and Jackson will have the opportunity to
earn up to four times their current base salary (i.e. $1,800,000,
$1,600,000 and $1,600,000 respectively, the "Maximum Bonuses").
(b) Up to half of the Maximum Bonus ("Payment 1") will be payable to each
individual as soon as practicable after the close of the Company's books
for the period ending December 31, 2002 based on the attainment of fully
diluted earnings-per-share targets (calculated after accrual(s) for the
LBIP) as shown in Table B below
(c) Up to the full Maximum Bonus less any payments made under (b) above
("Payment 2") will be payable to each individual as soon as practicable
after the close of the Company's books for the period ending December 31.
2005 based on the attainment of fully diluted earnings-per-share targets
(calculated after accrual(s) for the LBIP) as shown in Table B below.
(d) Any individual who resigns voluntarily or is terminated for any reason
prior to December 31, 2002 would forfeit any rights to payments under this
program. Any individual who resigns voluntarily or is terminated for any
reason after December 31, 2002 and prior to December 31, 2005 would forfeit
any rights to Payment 2 under this program.
(e) Upon a change of control, the Committee at its discretion may make some
payment to each individual. (Among other things, the Committee will
consider other payments mandated with employment contracts to avoid
triggering the 20% excise tax which currently is invoked by exceeding a
payment of three times total compensation.)
<TABLE>
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TABLE B
PAYMENT 1
CUMULATIVE EPS*** % OF MAXIMUM
EPS OBJECTIVE*** OBJECTIVE BONUS IMPLIED CAGR
CALENDAR 2002 2000-02 PAYABLE* BASEYEAR**-2002
---------------- ------------------- ------------- ----------------
<S> <C> <C> <C>
+ $2.11 + $5.15 50.00% + 25%
$1.87 $4.72 33.33% 20%
$1.64 $4.31 16.67% 15%
++ $1.44 ++ $3.93 0.00% + 10%
PAYMENT 2
CUMULATIVE EPS*** % OF MAXIMUM
EPS OBJECTIVE*** OBJECTIVE BONUS IMPLIED CAGR
CALENDAR 2005 2000-05 PAYABLE* BASEYEAR**-2005
---------------- ------------------- ------------- ----------------
+ $4.12 + $15.20 100.00% + 25%
$3.22 $12.87 66.67% 20%
$2.50 $10.87 33.33% 15%
+ $1.91 ++ $ 9.17 0.00% ++ 10%
</TABLE>
* Interpolate bonus between discrete points shown below
** Base year is FY99 when fully diluted earnings per share were $1.08
*** Attainment of either the calendar-year (first column) or cumulative (second
column) objective qualifies the individual for the appropriate "% of Maximum
Bonus payable"
+ Greater than or equal to
++ Less than or equal to
