Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Form 10-K for Fiscal Year End 09/30/95 53 299K
2: EX-10.(D) Restricted Stock Agreement 5 24K
3: EX-10.(E) Employment Agreement of Ovitz 20 47K
4: EX-10.(M) Cash Bonus Performance Plan 9 26K
5: EX-10.(S) Disney Salaried Savings & Investment Plan 149 194K
6: EX-21 List of Subsidiaries 1 5K
7: EX-27 Financial Data Schedule 2 8K
EX-10.(M) — Cash Bonus Performance Plan
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EXHIBIT 10(m)
1996 CASH BONUS PERFORMANCE PLAN FOR
ELIGIBLE EXECUTIVE OFFICERS OF DC HOLDCO, INC.
PURPOSE OF PLAN
The purpose of the Plan is to promote the success of the Company by
providing to participating executives bonus incentives that qualify as
performance-based compensation within the meaning of Section 162(m) of the Code.
DEFINITIONS AND TERMS
2.1 ACCOUNTING TERMS. Except as otherwise expressly provided or the
context otherwise requires, financial and accounting terms are used as defined
for purposes of, and shall be determined in accordance with, generally accepted
accounting principles, as from time to time in effect, as applied and reflected
in the consolidated financial statements of the Company, prepared in the
ordinary course of business.
2.2 SPECIFIC TERMS. The following words and phrases as used herein
shall have the following meanings unless a different meaning is plainly required
by the context:
"BASE SALARY" means the aggregate base annualized salary of a
Participant from the Company and all affiliates of the Company at the time of
the adoption of the Plan, or when the Participant first becomes eligible to
participate (if after that time), exclusive of any commissions or other actual
or imputed income from any Company-provided benefits or perquisites, but prior
to any reductions for salary deferred pursuant to any deferred compensation plan
or for contributions to a plan qualifying under Section 401(k) of
the Code or contributions to a cafeteria plan under Section 125 of the Code.
"BASE SALARY MULTIPLE" means an amount equal to 10 times Base Salary.
"BONUS" means a cash payment or payment opportunity as the context
requires.
"BUSINESS CRITERIA" means one or any combination of Net Income, Return
on Equity, or Return on Assets.
"CAPCITIES ACQUISITION" means the pending acquisition of Capital
Cities/ABC, Inc.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITTEE" means the Committee established to administer the Plan in
accordance with Section 3.1 and Section 162(m) of the Code.
"COMPANY" means DC Holdco, Inc. and any successor, whether by merger,
ownership of all or substantially all of its assets, or otherwise.
"ELIGIBLE EXECUTIVE" means an Executive described in Section 4.4.
"EXECUTIVE" means a person who is or on the effective date of the
CapCities Acquisition will be an "executive officer" as defined in Rule 3b-7
under the Securities Exchange Act of 1934.
"NET INCOME" means the consolidated net income of the Company, as
reported in the audited financial statements of the Company for the Year,
subject to any adjustments required or permitted by the Plan.
"PARTICIPANT" means an Eligible Executive selected to participate in
the Plan by the Committee.
"PERFORMANCE TARGET(S)" means the specific objective goal or goals
(which may be cumulative and/or alternative) that are timely established in
writing by the
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Committee for each Executive for the Year in respect of any one or more of the
Business Criteria.
"PLAN" means the 1996 Cash Bonus Performance Plan for Eligible
Executive Officers of the Company, as amended from time to time.
"RETURN ON ASSETS" means Net Income divided by the average of the
total assets of the Company at the end of the four fiscal quarters of the Year,
as reported by the Company in its consolidated financial statements.
"RETURN ON EQUITY" means the Net Income divided by the average of the
common stockholders equity of the Company at the end of each of the four fiscal
quarters of the Year, as reported by the Company in its consolidated financial
statements.
"SECTION 162(m)" means Section 162(m) of the Code, and the regulations
promulgated thereunder, all as amended from time to time.
"TWDC" means The Walt Disney Company.
"YEAR" means the Company's 1996 fiscal year (including the operations
during such fiscal year of its predecessor, TWDC), which represents the
applicable performance period.
ADMINISTRATION OF THE PLAN
3.1 THE COMMITTEE. Prior to the time the Company becomes a public
company, the decision to establish the Plan, the selection of applicable
Business Criteria and Performance Target(s) and the selection of Participants
shall be made by the Compensation Committee of the Board of Directors of TWDC.
Thereafter, the Plan shall be administered by a Committee consisting of at least
three members of the Board of Directors of the Company, duly authorized by the
Board of Directors of the Company to administer the Plan, who (i) are not
eligible to participate in the Plan and (ii) are "outside directors" (within the
meaning of Section 162(m), including applicable transition provisions).
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3.2 POWERS OF THE COMMITTEE. The Committee shall have the sole
authority to establish and administer the Performance Target(s) and the
responsibility of determining from among the Eligible Executives those persons
who will participate in and receive Bonuses under the Plan and the amount of
such Bonuses and shall otherwise be responsible for the administration of the
Plan, in accordance with its terms. The Committee shall have the authority to
construe and interpret the Plan and any agreement or other document relating to
any Bonus under the Plan, may adopt rules and regulations governing the
administration of the Plan, and shall exercise all other duties and powers
conferred on it by the Plan, or which are incidental or ancillary thereto.
3.3 REQUISITE ACTION. A majority (but not fewer than two) of the
members of the Committee shall constitute a quorum. The vote of a majority of
those present at a meeting at which a quorum is present or the unanimous written
consent of the Committee shall constitute action by the Committee.
3.4 EXPRESS AUTHORITY (AND LIMITATIONS ON AUTHORITY) TO CHANGE TERMS
AND CONDITIONS OF BONUS. Without limiting the Committee's authority under other
provisions of the Plan, but subject to any express limitation of the Plan, the
Committee shall have the authority to accelerate a Bonus and to waive
restrictive conditions for a Bonus (including forfeiture conditions, but not
Performance Target(s)), in such circumstances as the Committee deems
appropriate.
4. BONUS PROVISIONS.
4.1 PROVISION FOR BONUS. Each Participant may receive a Bonus if and
only if the Performance Target(s) established by the Committee, relative to the
applicable Business Criteria, are attained. The applicable Performance
Target(s) shall be determined by the Committee consistent with the terms of the
Plan and Section 162(m). Notwithstanding the fact that the Performance
Target(s) have been attained, the Company may pay a Bonus of less than the
amount determined by the formula or standard established pursuant to Section 4.2
or may pay no Bonus at all.
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4.2 SELECTION OF PERFORMANCE TARGET(S). The specific Performance
Target(s) with respect to the Business Criteria must be established by the
Committee in advance of the deadlines applicable under Section 162(m) and while
the performance relating to the Performance Target(s) remains substantially
uncertain within the meaning of Section 162(m). At the time the Performance
Target(s) are selected, the Committee shall provide, in terms of an objective
formula or standard for each Participant, the method of computing the specific
amount that will represent the maximum amount of Bonus payable to the
Participant if the performance Target(s) are attained, subject to Sections 4.1,
4.7, 5.1 and 5.8.
4.3 MAXIMUM INDIVIDUAL BONUS. Notwithstanding any other provision
hereof, no Executive shall receive a Bonus under the Plan for the Year in excess
of the lesser of $10 million or his or her Base Salary Multiple.
4.4 ELIGIBLE CLASS OF PARTICIPANTS. Eligible Executives include only
Executives at or above the level of Executive Vice President, including the Vice
Chairman, but excluding the Chairman and Chief Executive Officer (whose annual
bonus is set by the terms of this employment agreement).
4.5 EFFECT OF MID-YEAR COMMENCEMENT OF SERVICE. To the extent
compatible with Sections 4.2 and 5.8, if services as an Executive commence after
the adoption of the Plan and the Performance Target(s) are established, the
Committee may grant a Bonus that is proportionately or otherwise adjusted based
on objective factors to take into account the period of actual service.
4.6 CHANGES RESULTING FROM MATERIAL ACQUISITIONS, DISPOSITIONS OR
RECAPITALIZATIONS; EXTRAORDINARY ITEMS; ACCOUNTING CHANGES. Subject to Section
5.8, in the event of a material change in accounting assumptions, principles or
practices after the Performance Target(s) are established, which change affects
the Year's results relative to the Business Criteria, or in the event of a
recapitalization, restructuring, merger, combination, consolidation, change in
capitalization or capital structure or other reorganization (except for the
CapCities Acquisition which will be taken into account by the Committee in
setting the Performance
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Target(s) for the Year), or any extraordinary dividend or other extraordinary
distribution (whether in the form of cash, securities or other property) or
acquisition, or other extraordinary event out of the ordinary course of business
in respect of or materially affecting the applicable Business Criteria, then the
Committee may, in the manner and to the extent, if any, it deems appropriate and
equitable to the Participants and consistent with the terms of the Plan,
proportionately adjust any or all of the Performance Target(s), based solely on
objective criteria, so as to neutralize, in the Committee's best judgment, the
effect of the change on the applicable pre-established Performance Target(s) for
the Year.
4.7 COMMITTEE DISCRETION TO DETERMINE BONUSES. The Committee has the
sole discretion to determine the standard or formula pursuant to which each
Participant's Bonus shall be calculated (in accordance with Section 4.2),
whether all or any portion of the amount so calculated will be paid, and the
specific amount (if any) to be paid to each Participant, subject in all cases to
the terms, conditions and limits of the Plan. The Committee may at any time
establish such additional conditions and terms of payment of Bonuses (including
but not limited to the achievement of other financial, strategic or individual
goals, which may be objective or subjective) as it may deem desirable in
carrying out the purposes of the Plan and may take into account such other
factors as it deems appropriate in administering any aspect of the Plan. The
Committee may not, however, increase the maximum amount permitted to be paid to
any individual under Section 4.2 or 4.3 of the Plan.
4.8 COMMITTEE CERTIFICATION. No Executive shall receive any payment
under the Plan unless the Committee has certified, by resolution or other
appropriate action in writing, that the amount thereof has been accurately
determined in accordance with the terms, conditions and limits of the Plan and
that the Performance Target(s) and any other material terms previously
established by the Committee or set forth in the Plan were in fact satisfied.
4.9 TIME OF PAYMENT. Subject to Section 4.8, Bonuses granted by the
Committee under Section 4.8 of the Plan shall be paid as and when determined by
the Committee. Any such payment shall be in cash or cash equivalent,
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subject to applicable withholding requirements. The Committee, in its sole
discretion, may defer, with any conditions it deems appropriate, the payout or
vesting of any Bonus.
GENERAL PROVISIONS
5.1 NO RIGHT TO BONUS OR CONTINUED EMPLOYMENT. Neither the
establishment of the Plan nor the provision for or payment of any amounts
hereunder nor any action of the Company, TWDC, the Board of Directors of either
of them or the Committee in respect of the Plan, shall be held or construed to
confer upon any person any legal right to receive, or any interest in, a Bonus
or any other benefit under the Plan, or any legal right to be continued in the
employ of the Company. TWDC and the Company expressly reserve any and all
rights to discharge an Executive in its sole discretion, without liability of
any person, entity or governing body under the Plan or otherwise.
Notwithstanding any other provision hereof and notwithstanding the fact that the
Performance Target(s) have been attained and/or the individual maximum amounts
pursuant to Section 4.2 have been calculated, the Company shall have no
obligation to pay any Bonus hereunder nor to pay the maximum amount so
calculated.
5.2 DISCRETION OF COMPANY, BOARD OF DIRECTORS AND COMMITTEE. Any
decision made or action taken by the Company or TWDC, the Board of Directors of
the Company or TWDC or by the Committee arising out of or in connection with the
construction, administration, interpretation and effect of the Plan shall be
within the absolute discretion of such entity and shall be conclusive and
binding upon all persons. No member of the Committee shall have any liability
for actions taken or omitted under the Plan by the member or any other person.
5.3 ABSENCE OF LIABILITY. A member of the Board or Directors of the
Company or TWDC or of the Committee or any officer of the Company or TWDC shall
not be liable for any act or inaction hereunder, whether of commission or
omission.
5.4 NO FUNDING OF PLAN. The Company shall not be required to fund or
otherwise segregate any cash or any
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other assets which may at any time be paid to Participants under the Plan. The
Plan shall constitute an "unfunded" plan of the Company. The Company shall not,
by any provisions of the Plan, be deemed to be a trustee of any property, and
any obligations of the Company to any Participant under the Plan shall be those
of a debtor and any rights of any Participant or former Participant shall be
limited to those of a general unsecured creditor.
5.5 NON-TRANSFERABILITY OF BENEFITS AND INTERESTS. Except as
expressly provided by the Committee, no benefit payable under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any such attempted action be void and no such
benefit shall be in any manner liable for or subject to debts, contracts,
liabilities, engagements or torts of any Participant or former Participant.
This Section 5.5 shall not apply to an assignment of a contingency or payment
due after the death of the Executive to the deceased Executive's legal
representative or beneficiary.
5.6 LAW TO GOVERN. All questions pertaining to the construction,
regulation, validity and effect of the provisions of the Plan shall be
determined in accordance with the laws of the State of California.
5.7 NON-EXCLUSIVITY. Subject to Section 5.8, the Plan does not limit
the authority of the Company, the Board or the Committee to grant awards or
authorize any other compensation under any other plan or authority, including,
without limitation, awards or other compensation based on the same Performance
Target(s) used under the Plan. In addition, Executives not selected to
participate in the Plan may participate in other plans of the Company.
5.8 SECTION 162(m) CONDITIONS; BIFURCATION OF PLAN. It is the intent
of the Company that the Plan and Bonuses paid hereunder satisfy and be
interpreted in a manner, that, in the case of Participants who are or may be
persons whose compensation is subject to Section 162(m), satisfies any
applicable requirements as performance-based compensation. Any provision,
application or interpretation of the Plan inconsistent with this intent to
satisfy the standards in Section 162(m) of the Code shall be
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disregarded. Notwithstanding anything to the contrary in the Plan, the
provisions of the Plan may at any time be bifurcated by the Board or the
Committee in any manner so that certain provisions of the Plan or any Bonus
intended (or required in order) to satisfy the applicable requirements of
Section 162(m) are only applicable to persons whose compensation is subject to
Section 162(m).
AMENDMENTS, SUSPENSION OR TERMINATION OF PLAN
The Board of Directors or the Committee may from time to time amend,
suspend or terminate in whole or in part, and if suspended or terminated, may
reinstate, any or all of the provisions of the Plan. Notwithstanding the
foregoing, no amendment may be effective without Board of Directors and/or
shareholder approval if such approval is necessary to comply with the applicable
rules of Section 162(m) of the Code.
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