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ITEL CORPORATION
MANAGEMENT INCENTIVE PLAN
ELIGIBILITY: Participants in the Management Incentive Plan (the "Plan")
shall be the Chief Executive Officer and such other executive officers of Itel
Corporation ("Itel") as shall be selected each calendar year for participation
in the Plan by the Compensation Committee of the Board of Directors of Itel (the
"Board") or a similar committee of the Board comprised of "outside directors" as
that term is defined by regulations issued by the Internal Revenue Service under
the provisions of the Omnibus Budget Reconciliation Act of 1993 limiting the
deductibility of executive compensation under Section 162(m) of the Internal
Revenue Code (the "Committee").
TARGETS: Each year each participant shall be assigned a Target expressed as
a percentage of the participant's base compensation for the year ("Salary").
Targets may be from 100% to 20% of Salary.
OBJECTIVES: Each year the Committee shall establish financial objectives
for the year (the "Objectives") and the percent of Target earned by levels of
achievement of each Objective. The Committee shall establish Targets and
Objectives during the first 90 days of the year or such earlier time as the
outcome of the Objectives is substantially uncertain. The Objectives may be any
one or any combination of the following:
The operating, pretax or net earnings of Itel, a subsidiary, a
division or business unit thereof, or an other entity where there is a
significant investment and opportunity to influence performance; return on
capital, tangible or total, employed by any of these entities as measured
by any of these earnings; or the realization of specified proceeds from
specific dispositions or dispositions in general by any of these entities.
If multiple Objectives are established, the Committee shall assign a
relative weighting to each Objective.
AWARDS: Amounts earned under the Plan shall be determined and paid by the
Committee as soon as practicable after the end of each year. Awards may be from
zero to 150% of target, but no participant may be awarded more than "$750,000"
for any one year. The Committee may establish deferred arrangements for the
payment of awards under the Plan and accrue interest on such deferred amounts at
rates not to exceed 140% of the U.S. Treasury 10-year note rate in effect from
time to time.
Prior to payment of any award under the Plan for a given year, the
Committee shall certify, in writing, the level of achievement of each Objective
that was actually attained for such year.
AUTHORITY OF COMMITTEE: The Committee has the authority and responsibility
for the interpretation, administration and application of the provisions of the
Plan, and the Committee's interpretations of the Plan, and all actions taken by
it and determinations made by it shall be binding on all persons. No Board or
Committee members shall be liable for any determination, decision or action made
in good faith with respect to the Plan.
EFFECTIVE DATE: Effective for 1995 and subsequent years subject to approval
of the Stockholders of Itel at their next annual meeting. No participant shall
be paid the compensation represented by the awards under this Plan absent such
Stockholder approval.
AMENDMENT AND TERMINATION: The Committee may amend or terminate the Plan at
any time, provided, however, that in no event shall the Committee, after the
period for establishing Objectives for a year, adjust for that year any Targets,
Objectives, or the percent of Target earned by levels of achievement of each
Objective in a manner that would increase the amount of compensation that would
otherwise be payable absent such adjustment.
February 9, 1995
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