IMAGISTICS INTERNATIONAL INC. KEY EMPLOYEES' INCENTIVE PLAN
As Amended January 8, 2002
IMAGISTICS INTERNATIONAL INC.
KEY EMPLOYEES' INCENTIVE PLAN
1. Purpose of the Plan. The Imagistics Key Employees' Incentive Plan (the
"Plan") is designed to provide additional incentives for key employees of
Imagistics International Inc. (the "Company") and its subsidiaries and
affiliates by the making awards of performance-based incentive compensation.
Such awards will be designed to retain or attract, and to provide additional
incentive to, key employees, having regard for their individual potential,
location, contributions to the Company and other appropriate considerations.
2. Administration of the Plan.
(a) The Committee. The Plan shall be administered by a committee (the
"Committee") which shall consist of members of the Board of Directors of
the Company (the "Board"), each of who qualifies as a "disinterested
person" within the meaning of Rule 16b-3 ("Rule 16b-3") promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and an "outside director" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code") (directors meeting both such requirements being hereinafter
referred to as "Qualified Directors"), which Committee shall be composed of
not less than the minimum number of Qualified Directors from time to time
required by Rule 16b-3 or Section 162(m). The Committee shall have full
authority to establish rules for the administration of the Plan and to make
administrative decisions regarding the Plan or awards hereunder. The
Committee may delegate its functions hereunder to the extent consistent
with applicable law.
(b) Determination Binding. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan, any award, or any award
agreement or certificate shall be with and in the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive, and
binding upon all persons, including the Company, any affiliate, any
participant, any holder or beneficiary of any award, and any employee of
the Company or of any affiliate.
3. Awards.
(a) Determination of Participation and Award Amounts. The Committee
will determine participants in the Plan and the terms and amounts of each
participant's minimum, target and maximum award opportunities hereunder.
(b) Award Types. Awards may be in the form of Annual Incentives or
cash incentive units ("CIUs"), each as defined below, or any combination of
them as may, in the judgment of the Committee be best calculated to further
the purposes of the Plan.
(i) Annual Incentives shall be awards in the form of annual cash
payments of specified percentages of base salary, which are paid based
upon the achievement of pre-established annual corporate, unit and/or
individual performance objectives.
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(ii) CIUs represent a right to receive cash, the receipt and
amount of which are entirely contingent upon the extent to which
specified performance criteria are achieved during a related three
year period.
(c) Earning Awards. Awards shall be paid hereunder to the extent the
Company and participant achieve Performance Goals as specified by the
Committee consistent with Section 9(c). Each participant's award
opportunity shall be computed based upon a percentage of such participant's
annual base salary and shall be denominated in cash in a proportion as
determined by the Committee. Each award agreement will identify the
minimum, target and maximum levels of performance required for payment of
the related award.
(d) Award Period. The Committee shall fix the period during which
performance is to be measured and the time at which the value of the Annual
Incentives or the CIUs are to be paid.
4. Participants. Nothing in the Plan shall prevent a participant from being
included in any other employee benefit or stock option or purchase plan of the
Company or its affiliates, or from receiving any compensation provided by them.
Neither the Plan nor any action taken thereunder shall be understood as giving
any person any right to be retained in the employ of the Company or any
subsidiary or affiliate, nor shall any person (including participants in a prior
year) be entitled as of right to be selected as a participant in the Plan any
subsequent year.
5. Amendment/Termination of Plan. The Committee may amend, suspend, or
terminate the Plan in whole or in part at any time; provided, however, that if
in the judgment of the Committee such amendment or other action would have a
material effect on the Plan, such amendment or other action must be taken by the
Board. No amendment that would materially increase the cost of the Plan shall be
made effective unless approved by the shareholders of the Company; provided,
however, that this Plan may not be amended, suspended or terminated from and
after the date of a Change of Control (as hereinafter defined) or in
anticipation of a Change of Control so as to reduce or otherwise adversely
affect the benefits under outstanding awards to which participants in the Plan
would be entitled upon a Change of Control.
6. Change of Control.
(a) Awards. Except as the Committee may otherwise provide in any award
agreement, upon a Change of Control all awards hereunder shall be paid as
soon as practicable following the Change in Control in an amount equal to
the value of the target award for the relevant performance period in which
the Change of Control occurs, multiplied by a fraction, the numerator of
which is the number of months (including partial months) in the period
beginning on the first day of the relevant performance period and ending on
the date of the Change of Control, and the denominator of which is the
number of months in such performance period.
(b) Change of Control. For purposes of this Plan, a "Change of
Control" shall be deemed to have occurred if:
(i) There is an acquisition, in any one transaction or a series
of transactions (other than from the Company), by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of either the
then outstanding shares of common stock of the Company or the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, but
excluding, for this purpose, any such acquisition by
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the Company or any of its subsidiaries, or any employee benefit plan
(or related trust) of the Company or its subsidiaries, or any
corporation with respect to which, following such acquisition, more
than 50 percent of the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by the individuals and entities who were the beneficial
owners, respectively, of the common stock and voting securities of the
Company immediately prior to such acquisition in substantially the
same proportion as their ownership, immediately prior to such
acquisition, of the then outstanding shares of common stock of the
Company or the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors, as the case may be; or
(ii) Individuals who, as of December 3, 2001, constitute the
Board (as of such date, the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any
individual becoming a director subsequent to December 3, 2001 whose
election, or nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(iii) There occurs either (x) the consummation of a
reorganization, merger or consolidation, in each case, with respect to
which the common stock and voting securities of the Company
immediately prior to such reorganization, merger or consolidation do
not, following such reorganization, merger or consolidation,
represent, either by remaining outstanding or being converted into
securities of the resulting corporation, directly or indirectly, more
than 50 percent of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or (y) an approval by the
shareholders of the Company of a complete liquidation or dissolution
of the Company or of the sale or other disposition of all or
substantially all of the assets of the Company.
(c) Legal Fees. Any right to a payment as provided in this Section
6(a) shall be a contract right of the executives as herein described,
enforceable against the Company, its assigns and successors. Upon and
following the occurrence of a Change of Control, any decision rendered
pursuant to this Section 6 may be contested by any claimant, and the
Company agrees to pay, to the full extent permitted by law, all legal fees
and expenses which a claimant may reasonably incur as a result of any
contest, provided the claimant substantially prevails in the outcome
thereof.
7. Termination of Employment; Transfer Restrictions.
(a) Except as otherwise provided by the Committee, if a participant's
employment with the Company terminates due to death, disability or, if
participant is not less than 55 years of age, retirement, the participant
or his beneficiary, as the case may be, shall be paid as soon as
practicable following the date of termination an amount equal
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to the value of the target award for the relevant performance period in
which the termination occurs, multiplied by a fraction, the numerator of
which is the number of months (including partial months) in the period
beginning on the first day of the relevant performance period and ending
with the date as of which the participant's employment with the Company so
terminated, and the denominator of which is the is the number of months in
such performance period.
(b) Except as otherwise provided by the Committee, if a participant's
employment with the Company is terminated for any other reason, the
participant's right to the payment of an award and all other rights under
this Plan will be forfeited, and no amount will be paid or payable
hereunder to or in respect of such participant.
(c) No award, and no right under any award shall be assignable,
alienable, saleable, or transferable by a participant other than by will or
by the laws of descent and distribution. Each award, and each right under
any award, shall be issuable or payable only to the participant, or, if
permissible under applicable law, to the participant's guardian or legal
representative and any purported pledge, alienation, attachment, or
encumbrance thereof shall be void and unenforceable against the Company or
any affiliate.
8. Effectiveness. The Plan shall become effective on the date it is
initially approved by the sole stockholder of the Company (the "Effective
Date").
9. Criteria.
(a) Covered Employees. The provisions of this Section 9 shall be
applicable to awards under the Plan to "Covered Employees" if the Committee
so provides at the time of grant (such awards being referred to as "Covered
Awards"). For purposes of this Section 9, "Covered Employees" means
participants in the Plan who are designated by the Committee prior to the
grant of an award hereunder who are, or are expected to be at the time
taxable income will be realized with respect to the award, "covered
employees" within the meaning of Section 162(m) of the Code.
(b) Determinations. Covered Awards shall be made subject to the
achievement of one or more pre-established Performance Goals (as defined
below), in accordance with procedures to be established by the Committee
from time to time. Notwithstanding any provision of the Plan to the
contrary, the Committee shall not have discretion to waive or amend such
Performance Goals or to increase the amount payable pursuant to Covered
Awards after the Performance Goals have been established; provided,
however, that the Committee may, in its sole discretion, reduce the amount
that would otherwise be payable with respect to any Covered Award, and
provided, further, that the provisions of Section 6 shall override any
contrary provision of this Section 9.
(c) Performance Goals. "Performance Goals" under the Plan will be one
or more objective performance goals, established by the Committee at the
time a grant is made, and based upon the attainment of targets for one or
any combination of the following criteria; (i) net income; (ii) earnings
before income taxes; (iii) earnings per share; (iv) return on shareholders'
equity; (v) expense management; (vi) profitability of an identifiable
business unit or product; (vii) revenue growth; (viii) earnings growth;
(ix) shareholder return; (x) cash flow; (xi) return on assets; (xii) pretax
operating income; (xiii) net economic profit (operating earnings minus a
charge for capital); (xiv) customer satisfaction; (xv) provider
satisfaction; (xvi) employee satisfaction; (xvii) quality of networks; or
(xviii) strategic innovation. Performance Goals also may consist of
attainment of specified levels of Company performance, based upon one or
more of the criteria described above relative to prior periods of the
performance of other corporations.
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Performance Goals will be set by the Committee within any time period
required to ensure deductibility under the Code.
(d) Written Certification; Maximum Annual Award. No payment shall be
made pursuant to a Covered Award unless and until the Committee shall have
certified in writing that the applicable Performance Goals have been
attained. The maximum amount payable pursuant to Covered Awards to a
particular Covered Employee for any fiscal year of the Company shall be $5
million.
(e) Deferrals. The Committee may from time to time establish
procedures pursuant to which Covered Employees will be permitted or
required to defer receipt of awards under the Plan.
(f) Composition of Committee. Notwithstanding any other provision of
the Plan, for all purposes involving Covered Awards, the Committee shall
consist of at least two members of the Board, each of whom is an "outside
director" within the meaning of Section 162(m).
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Key Employees' Incentive Plan - Imagistics International Inc.
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