EXHIBIT (D)(8)
MIKASA, INC.
INCENTIVE COMPENSATION PLAN
1. Definitions
(a) "Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or
under common control with such Person. For purposes of this
Plan, the term "control," (including, with correlative
meanings, the terms "controlling," "controlled by," and "under
common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of
voting securities or by contract or otherwise.
(b) "Award" means a unit representing a fixed percentage of
the Plan Pool.
(c) "Beneficial Owner" has the meaning set forth in Rule 13d-3
promulgated under the Exchange Act as in effect on the date
hereof. The terms "Beneficial Ownership" and "Beneficially
Own" shall have correlative meanings.
(d) "Board" means the Board of Directors of Mikasa.
(e) "Cause" means, with respect to the termination of
employment of a Participant by Mikasa, (i) any willful
engaging by the Participant, in the Participant's capacity as
an employee of Mikasa, in gross misconduct that has, or is
intended to have, a material adverse effect on Mikasa or its
Affiliates; (ii) any conviction of the Participant of a felony
or other serious crime involving moral turpitude or (iii) any
other circumstance that would constitute "Cause" under any
written employment agreement with Mikasa to which the
Participant is a party; provided, that any act or failure to
act of the Participant shall not be considered "willful"
unless done or omitted to be done by the Participant not in
good faith and without reasonable belief that the
Participant's action or omission was in the best interest of
Mikasa.
(f) "Committee" means a committee composed of four individuals
designated by JGD (or, at JGD's option, two individuals with
two votes each) ("JGD Designees") and three executive officers
of Mikasa selected by the Board prior to the consummation of
the Merger ("Mikasa Designees"); provided, that if any of the
Mikasa Designees ceases to be an employee of Mikasa for any
reason, such executive officer shall cease to be a Mikasa
Designee and another executive officer of Mikasa will be
selected by the departing Mikasa Designee together with (or
solely by, if the Mikasa Designee has died) the remaining
Mikasa Designees, and such other executive officer will
thereby become a Mikasa Designee.
(g) "Consummation Date" has the meaning set forth in Section 8
hereof.
(h) "Control Transaction" means a transaction resulting in:
(i) the JGD Group ceasing to Beneficially Own at least 50% of
the Voting Power of the Voting Securities of Mikasa then
outstanding; (ii) the merger, consolidation or other business
combination of Mikasa with any other Person; (iii) Mikasa
selling, leasing or otherwise transferring 50% or more of its
assets to any Person(s); or (iv) the liquidation, dissolution
or winding-up of Mikasa.
(i) "Disability" means the physical disability or mental
incapacity of a Participant which entitles such Participant to
benefits under a long term disability plan of Mikasa or which
would entitle such Participant to benefits if he were a
participant in such plan or which would otherwise qualify such
Participant for social security disability insurance benefits.
(j) "Effective Time" has the meaning set forth in the Merger
Agreement.
(k) "Equity Securities" of any Person, means any and all
common stock, preferred stock and any other class of capital
stock of, and any partnership or limited liability company
interests in, such Person or any other similar interests of
any Person that is not a corporation, partnership or limited
liability company.
(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated
thereunder.
(m) "Fiscal Year" means a fiscal year of Mikasa occurring
during the Plan Period.
(n) "Formula" shall have the meaning set forth in Section 4
hereof.
(o) "Grant Date" means, with respect to a Fiscal Year, the
date, which shall be as soon as practicable following the
completion of such Fiscal Year, on which grants of Awards are
made to Participants generally pursuant to Section 3 hereof
with respect to such completed Fiscal Year.
(p) "JGD" means J.G. Durand Industries, S.A., a societe
anonyme organized under the laws of France, and any successor
thereto.
(q) "JGD Group" means JGD and its Affiliates.
(r) "Merger" has the meaning set forth in the Merger
Agreement.
(s) "Merger Agreement" means the Agreement and Plan of Merger,
dated September 10, 2000, among Mikasa, JGD, Mountain
Acquisition Corp. and certain other parties, as it may be
amended from time to time.
(t) "Mikasa" means Mikasa, Inc., a Delaware corporation, and
any successor thereto.
(u) "Net Income" means, with respect to any Fiscal Year, the
net after-tax income of Mikasa (excluding (i) the amortization
of any pushed-down goodwill resulting from the Merger, (ii)
any ongoing financing or interest charges (including any fees
associated therewith) incurred as a result of a change in
Mikasa's pre-Merger capital structure resulting from the
Merger and any one time or extraordinary charges resulting
from the Merger, (iii) any one time or extraordinary charges
resulting from any acquisition or disposition of a business,
Person or assets by Mikasa or any of its subsidiaries or any
merger, consolidation or other business combination involving
Mikasa after the Effective Time other than acquisition or
disposition of assets in the ordinary course of business
consistent with past practice, (iv) the impact of any change
in Mikasa's accounting policies or procedures and (v) any
expense related to this Plan).
(v) "Participants" shall mean the Mikasa Designees and the
employees of Mikasa as may be selected by the Mikasa Designees
from time to time to participate in this Plan pursuant to
Section 3 hereof.
(x) "Person" means an individual, corporation, partnership,
limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
(y) "Plan" means this Mikasa, Inc. Incentive Compensation
Plan.
(z) "Plan Period" means Fiscal Years 2000, 2001, 2002 and
2003; provided, that the Plan Period will continue until the
Grant Date with respect to Fiscal Year 2003.
(aa) "Plan Pool" means the cash pool to be distributed to the
Participants in accordance with this Plan; provided that the
Plan Pool shall not exceed the Plan Pool Maximum.
(bb) "Plan Pool Maximum" means $15,000,000.
(cc) "Voting Power" means, with respect to any Voting
Securities, the aggregate number of votes attributable to such
Voting Securities that could generally be cast by the holders
thereof for the election of directors or similar managing
persons at the time of determination (assuming such election
were then being held).
(dd) "Voting Securities" means, (i) with respect to Mikasa,
the Equity Securities of Mikasa entitled to vote generally for
the election of directors of Mikasa, and (ii) with respect to
any other Person, any securities of or interests in such
Person entitled to vote generally for the election of
directors or any similar managing person of such Person.
2. Administration of this Plan
This Plan shall be administered by the Committee. Except to the extent
authority is expressly granted to the Mikasa Designees or the JGD Designees
hereunder, the Committee shall have full authority to administer this Plan,
including authority to interpret and construe any provision of this Plan and to
adopt such rules and regulations for administering this Plan as it may deem
necessary. Decisions of the Committee shall be final and binding on all parties.
No member of the Board or the Committee shall be liable to any Participant for
any action, omission, or determination relating to this Plan.
3. Grant of Awards
The percentage of the Plan Pool represented by all of the Awards
granted pursuant to this Section 3 shall not equal greater than 100%; provided
that the percentages of the Plan Pool represented by any Awards or portions
thereof that are forfeited by Participants pursuant to Section 7 hereof may be
reallocated as new Awards to newly-hired employees, employees who have been
promoted or employees whose job responsibilities have been increased, whether or
not such employees have already received Awards pursuant to this Plan, as may be
determined by the JGD Designees (if such employees are Mikasa Designees) or the
Mikasa Designees. On the Grant Date with respect to each Fiscal Year during the
Plan Period (a) the JGD Designees shall grant an Award to each Mikasa Designee
and (b) the Mikasa Designees, in consultation with the JGD Designees (whose
opinion shall be taken into account), shall grant an Award to each of the other
Participants in the Plan; provided that on the Grant Date with respect to Fiscal
Year 2000 Awards shall be granted with respect to 25% of the Plan Pool and on
each successive Grant Date Awards shall be granted such that the aggregate
Awards outstanding on the Grant Date with respect to Fiscal Years 2001, 2002 and
2003 shall equal at least 50%, 75% and 100% of the Plan Pool, respectively; and
provided further that an employee hired, promoted or whose job responsibilities
increased after the Grant Date with respect to any Fiscal Year may be granted an
Award at the time of such event.
4. Plan Pool
With respect to each Fiscal Year, as soon as practicable following the
completion of the audit of Mikasa's financial statements for such Fiscal Year,
an irrevocable amount will be credited to a bookkeeping account for the Plan
Pool. Each such annual irrevocable amount credited shall be determined by Mikasa
in accordance with the formula set forth on the attached Exhibit A ("Formula"),
which determination shall be confirmed by Mikasa's auditors in conjunction with
the completion of the audit for such Fiscal Year; provided that in no event
shall the Plan Pool be greater than the Plan Pool Maximum.
5. Payment of Awards
Subject to Sections 8 and 9, as soon as practicable following the
completion of the audit of Mikasa's financial statements for Fiscal Year 2003,
(i) the Plan Pool will be determined by Mikasa by applying the Formula with
respect to Fiscal Year 2003 and adding the result of such application to the
amounts credited to the Plan Pool with respect to prior Fiscal Years, which
determination shall be confirmed by Mikasa's auditors in conjunction with the
completion of the audit for Fiscal Year 2003, (ii) the Committee will calculate
the cash payments to be made to the Participants based upon their aggregate
vested and outstanding Awards and (iii) Mikasa shall make the cash payments to
all Participants with respect to their aggregate vested and outstanding Awards.
6. Vesting of Awards
On each Grant Date, so long as a Participant is employed by Mikasa on
such Grant Date, the aggregate Awards granted to such Participant on or prior to
such Grant Date shall vest as follows: (i) with respect to Fiscal Year 2000's
Grant Date, 0%; (ii) with respect to Fiscal Year 2001's Grant Date, 30%; (iii)
with respect to Fiscal Year 2002's Grant Date, 60%; and (iv) with respect to
Fiscal Year 2003's Grant Date, 100%.
7. Termination of Employment
(a) Termination of Employment by Mikasa for Cause. Unless set
forth otherwise in any written employment agreement between
Mikasa and a Participant, if Mikasa terminates the employment
of a Participant with Mikasa for Cause during the Plan Period,
such Participant shall forfeit all of his Awards (whether or
not vested) and shall not be entitled to any payments by
Mikasa with respect to such Awards pursuant to this Plan or
otherwise.
(b) Termination of Employment by the Participant. Unless set
forth otherwise in any written employment agreement between
Mikasa and a Participant, if a Participant terminates his
employment with Mikasa for any reason during the Plan Period,
Mikasa shall pay to such Participant at the time payments
under the Plan are made generally to other Participants a cash
amount based upon the aggregate vested portion of his Awards
as of the date of such termination, but the Participant shall
forfeit the unvested portion of his Awards upon such
termination and shall not be entitled to any payments by
Mikasa with respect to such unvested portion pursuant to this
Plan or otherwise.
(c) Termination of Employment due to Death or Disability or by
Mikasa without Cause. Unless set forth otherwise in any
written employment agreement between Mikasa and a Participant,
if a Participant's employment with Mikasa is terminated as a
result of the death or Disability of the Participant or Mikasa
terminates the employment of a Participant with Mikasa without
Cause during the Plan Period, such Participant's aggregate
Awards shall automatically vest in full upon such termination,
and Mikasa shall pay to the Participant at the time payments
under the Plan are made generally to other Participants a cash
amount based upon his aggregate vested and outstanding Awards.
8. Control Transactions
Upon the date of the consummation of a Control Transaction (the
"Consummation Date"), the Plan Pool shall be determined by Mikasa (which
determination shall be confirmed by Mikasa's auditors) by adding (i) the amounts
credited to the Plan Pool with respect to the Fiscal Years in the Plan Period
completed prior to the Consummation Date, (ii) if a Fiscal Year has been
completed prior to the Consummation Date but no amount has yet been credited,
the result of the application of the Formula with respect to such Fiscal Year
and (iii) with respect to the uncompleted Fiscal Year during which the
Consummation Date occurs, the result of the application of the Formula with
respect to the completed portion of such Fiscal Year. As soon as practicable
after the determination of the Plan Pool, payments shall be made to the
Participants in accordance with their aggregate outstanding Awards (regardless
of whether such Awards are vested or unvested) and the Committee will also
distribute any unallocated portion of the Plan Pool among the Participants in
such manner as it may determine in its discretion.
9. Termination and Amendment
The Committee may terminate or amend this Plan at any time, in whole or
in part, in its discretion, subject to the agreement of at least two Mikasa
Designees. Upon termination of the Plan, the Plan Pool shall be determined by
Mikasa (which determination shall be confirmed by Mikasa's auditors), subject to
the Plan Pool Maximum, by adding (i) the amounts credited to the Plan Pool with
respect to the Fiscal Years in the Plan Period completed prior to the date of
such termination, (ii) if a Fiscal Year has been completed prior to the date of
such termination but no amount has yet been credited, the result of the
application of the Formula with respect to such Fiscal Year, and (iii) with
respect to the uncompleted Fiscal Year during which such termination occurs, the
result of the application of the Formula with respect to the completed portion
of such Fiscal Year. As soon as practicable after the determination of the Plan
Pool, payments shall be made to the Participants in accordance with their
aggregate outstanding Awards (regardless of whether such Awards are vested or
unvested) and the Committee will also distribute any unallocated portion of the
Plan Pool among the Participants in such manner as it may determine in its
discretion.
10. Certain Adjustments
In the event of a merger or consolidation involving Mikasa, the
acquisition or disposition by Mikasa of any substantial business unit, the
occurrence of any transaction or corporate event which affects Mikasa's
capitalization or the occurrence of any other transaction or corporate event
(other than the Merger), including without limitation any other transactions
with JGD or any of its Affiliates, outside of the ordinary course of business
which could reasonably be expected to have a substantial impact on Mikasa's Net
Income for any Fiscal Year, the Committee will review, in good faith, the effect
of such event on the operation of the Plan and will reasonably adjust the
Formula as it determines to be appropriate in light of the circumstances,
subject to the agreement of at least two Mikasa Designees.
11. Miscellaneous
(a) Non-Assignability. The right of a Participant or of any
other person to any payment under this Plan shall not be
assigned, transferred, pledged or encumbered, and any
purported assignment, transfer, pledge or encumbrance shall be
null and void.
(b) Beneficiaries. If a Participant shall not be alive at the
time an amount is to be paid to the Participant under this
Plan, the amount shall be paid to his beneficiary designated
pursuant to this Section 11(b) or to his estate if he shall
have no such beneficiary. Each Participant may designate or
change his beneficiary by delivering a written designation to
the Committee.
(c) Applicable Law. This Plan and all rights under this Plan
shall be governed by and construed in accordance with the laws
of the State of New Jersey, without reference to its
principles of conflicts of law.
(d) Applicable Withholdings. Mikasa may withhold from any
amounts payable to the Participants under this Plan all
federal, state, city or other taxes that Mikasa may reasonably
determine are required to be withheld pursuant to any
applicable law or regulation.
(e) No Contract of Employment. Nothing contained in this Plan
shall confer upon any Participant any right with respect to
the continuation of such Participant's employment by Mikasa or
interfere in any way with the right of Mikasa at any time to
terminate such employment.
(f) No Right to Participate. Except as otherwise set forth
herein or in any written employment agreement between Mikasa
and a Participant, no employee shall have any claim or right
to participate in this Plan. The selection of an employee to
be granted an Award pursuant to this Plan with respect to any
Fiscal Year shall not give such employee any right to be
granted an Award with respect to any subsequent Fiscal Year.
Except as otherwise set forth herein, the administration of
the Plan is intended to be entirely discretionary on the part
of the Committee.
(f) Plan Unfunded. This Plan shall be unfunded. Payments under
this Plan shall be made from the general assets of Mikasa. The
Participants in this Plan shall be general unsecured creditors
of Mikasa. No Participant shall have any right, title, claim
or interest in or with respect to any specific assets of
Mikasa in connection with the Participant's participation in
this Plan.
(g) Construction. All references herein to the masculine
gender shall include the feminine. All Exhibits attached to
this Plan are incorporated herein by reference and made a part
hereof. The headings in this Plan are inserted for convenience
of reference only and shall not be a part of or control or
affect the meaning of any provision hereof.
(h) Example. An example of a Participant's receipt of Awards
and payout of such Awards under various scenarios is attached
hereto as Exhibit B for illustrative purposes only. To the
extent that the attached example is inconsistent with the
express terms of this Plan, the express terms of this Plan
shall govern.
<PAGE>
EXHIBIT A
FORMULA
(*) : % of incremental Net Income credited to Plan Pool
Plan Pool Maximum : 15,000,000
Minimum Net Income for each Fiscal Year which must be achieved in order for
any amounts to be credited to the Plan Pool with respect to such Fiscal
Year
2000 2001
17,500,000 21,000,000
2000 2001
Net Income % (*) Net Income %(*)
From Up to From Up to
- 7,500,000 0.0% - 10,000,000 0.0%
7,500,000 12,500,000 3.0% 10,000,000 16,000,000 3.0%
12,500,000 15,000,000 11.0% 16,000,000 20,000,000 11.0%
15,000,000 25,000,000 13.5% 20,000,000 30,000,000 13.5%
If more than 25,000,000 15.0% If more than 30,000,000 15.0%
2002 2003
23,800,000 27,700,000
2002 2003
Net Income % (*) Net Income % (*)
From Up to From Up to
- 12,000,000 0.0% - 15,000,000 0.0%
12,000,000 16,000,000 3.0% 15,000,000 18,000,000 3.0%
16,000,000 25,000,000 11.0% 18,000,000 25,000,000 11.0%
25,000,000 37,000,000 13.5% 25,000,000 44,000,000 13.5%
If more than 37,000,000 15.0% If more than 44,000,000 15.0%
Examples (for illustrative purposes only)
<TABLE>
<CAPTION>
2000 2001 2002 2003
<S> <C> <C> <C> <C>
Net Income 15,000,000 19,200,000 23,400,000 27,600,000
Credit to Plan Pool 0 0 0 0
Plan Pool 0 0 0 0
Net Income 22,500,000 28,800,000 35,100,000 41,400,000
Credit to Plan Pool 1,437,500 1,808,000 2,473,500 3,074,000
Plan Pool 1,437,500 3,245,500 5,719,000 8,793,000
Net Income 25,000,000 32,000,000 39,000,000 46,000,000
Credit to Plan Pool 1,775,000 2,270,000 3,030,000 3,725,000
Plan Pool 1,775,000 4,045,000 7,075,000 10,800,000
Net Income 27,500,000 35,200,000 42,900,000 50,600,000
Credit to Plan Pool 2,150,000 2,750,000 3,615,000 4,415,000
Plan Pool 2,150,000 4,900,000 8,515,000 12,930,000
Net Income 32,500,000 41,600,000 50,700,000 59,800,000
Credit to Plan Pool 2,900,000 3,710,000 4,785,000 5,795,000
Plan Pool 2,900,000 6,610,000 11,395,000 15,000,000
</TABLE>
