exv10w12



 





Exhibit 10.12


ACCO WORLD CORPORATION

LONG-TERM INCENTIVE PLAN

FOR KEY EMPLOYEES (the “Plan”)

(Effective as of January 1, 1995)





	1.  	Purpose of Plan.





          The purpose of the Long-Term Incentive Plan for Key Employees of ACCO World Corporation (the
“Plan”) is to aid ACCO World Corporation (the “Company”) in securing and retaining Key Employees of
outstanding ability by making it possible to offer them increased incentives to join or continue in
the service of the Company, and to encourage Key Employees to increase their efforts for the
welfare of the Company.




	2.  	Definitions.





          As used in the Plan, the following words shall have the following meanings:




               (a) “Chief Executive Officer” means the Chief Executive Executive Officer of the
Company;




               (b) “Detrimental Activity” shall mean willful, reckless or negligent activity that is
determined by the Salary Committee, in its sole discretion, on a case-by-case basis, to be
detrimental to the business or property of the Company or its affiliates;




               (c) “Long-Term Award” means a monetary award made to a Key Employee pursuant to the
Plan;




               (d) “Key Employee” means any person, including an officer or director of the Company
in the regular full-time employment of the Company who, in the opinion of the Committee, is
or is expected to be primarily responsible for the management, growth or protection of some
part or all of the business of the Company;




               (e) “Financial Measure” means one or more measures of financial performance of the
Company selected by the Salary Committee to serve as the benchmark for determining Company
Performance during the specified Performance Period as approved by the Parent Committee;




               (f) “Parent Committee” means the American Brands, Inc. Incentive Compensation
Committee for Subsidiaries and Corporate Office;



 









 






               (g) “Participant” means a Key Employee to whom a Long-Term Award has been made that
has not been forfeited. Participation shall be determined for each Key Employee for each
Performance Period by the Salary Committee;




               (h) “Performance Period” means the period specified with respect to a Long-Term Award
during which specified performance criteria are to be measured which shall be of at least
two years duration subject to paragraph 4.3 hereof; and




               (i) “Salary Committee” means the ACCO World Corporation Salary Committee appointed by
the Board of Directors of ACCO World Corporation.




	3.  	Administration of the Plan.






	 	3.1  	Responsibility for Administration.






(a) The administration of the Plan and the responsibility for implementing it shall
be the responsibility of the Salary Committee, except for those specific duties
delegated by the Plan to the Chief Executive Officer and the Parent Committee.




(b) The Salary Committee in its discretion may allocate responsibility among one or
more of its members and may delegate responsibility to one or more other persons or
committees as may be designated by it. The interpretation of the Plan by the
Committee will be final and binding on all Participants and any persons making a
claim on their behalf. Subject to the provisions for the Plan, the Committee shall
have the authority to establish, adopt or revise such rules and guidelines as it
deems necessary or appropriate for the administration of the Plan.




	 	3.2  	Communication of the Plan. The Chief Executive Officer or operating
head of the unit employing a Participant shall, at the beginning of each Performance
Period, cause each Participant to be notified of his selection as a Participant, the
Company Performance Goals and his Target Award (each herein below described). After
the end of each Performance Period when the amount of each Participant’s award has
been determined, the Chief Executive Officer or operating head of the unit employing a
Participant will cause each Participant to be provided with written notice of the
amount of payment, if any, and its relationship to the attainment of the Company
Performance Goals.




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	4.  	Long-Term Awards.






	 	4.1  	Performance Goals. For 1995 and the beginning of each Performance
Period thereafter, the Salary Committee shall establish Company Performance Goals
based on the Financial Measure established by the Salary Committee for such
Performance Period.
	 
	 	4.2  	Target Award. For 1995, and the beginning of each Performance Period
thereafter, there shall be established a Target Award for each Participant which shall
be the product of (i) the number of performance units awarded to the Participant and
(ii) the dollar value per unit at the targeted Company Performance level. The Salary
Committee shall determine the number of units that will be awarded to each
Participant. The aggregate amount of Target Awards for all Participants for each
Performance Period shall be subject to review and approval by the Parent Committee.
	 
	 	4.3  	Determination of Amount of Long-Term Award Payment.






(a) A Participant may be paid a minimum of 0% and a maximum of 300.0% of the Target
Award depending on the extent to which the Company Performance Goals for the
Performance Period have been achieved. The determination of the extent to which
the Company Performance Goals have been achieved shall be determined by the Salary
Committee, subject, however, to receipt of the auditor’s letter referred to in
Section 5 hereof and review and approval of the aggregate amount of all Long-Term
Awards by the Parent Committee.




(b) At the beginning of each Performance Period, the Salary Committee will
determine the appropriate Financial Measure and corresponding performance level to
be achieved as the Company Performance Goal. This determination also will include
a performance level at which minimum, targeted and maximum awards will be payable.
These targeted Financial Measure performance levels and payout matrices may vary by
organization unit.




(c) The Company Performance Goals may be reviewed during the Performance Period by
the Salary Committee. Adjustments may be made by the Salary Committee if economic
or other conditions have changed substantially from the beginning of the
Performance Period, subject to review and approval by the Parent Committee.



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(d) If a Participant is promoted into a higher grade, the Long-Term Award will be
calculated on a pro-rate basis for the time spent in each grade. If promoted into
an eligible position for the first tine, the Long-Term Award will be calculated
pro-rata for time in the Plan.




(e) If, during a Performance Period, a Participant transfers employment without an
intervening period to a company affiliated with the Company that has Long-Term
Awards granted under a similar such plan, the Participant will be entitled at the
end of that Performance Period to a payment that would otherwise have been pursuant
to this Long-Term Award as if the Participant had remained an employee of the
Company throughout the Performance Period, but prorated for the portion of the
Performance Period that elapsed prior to the transfer of employment, all as
determined by the Salary Committee. In addition, if the transfer is to a position
that is eligible for Long-Term Awards, the Participant shall be paid by the other
company the value of the number of performance units awarded to the Participant
based on the value per unit under the other company’s program and its Performance
Goals, but assuming that the Participant had been employed by the other company
throughout the Performance Period and then prorated for the portion of the
Performance Period that elapsed after the transfer of employment.




(f) If, during any Performance Period, a Participant transfers employment without
an intervening period to a company affiliated with the Company that does not grant
Long-Term Awards, or to another position in which the Participant is no longer
eligible for Long-Term Awards, the Participant will be entitled at the end of that
Performance Period to a payment that would otherwise have been made as if the
Participant had remained an employee of the Company throughout the Performance
Period, but prorated for the portion of the Performance Period that elapsed prior
to the Participant’s transfer of employment, all as determined by the Salary
Committee.




(g) In the event that a Participant’s employment with the Company commenced after
the Performance Period begins, but during the first half of a Performance Period,
the Participant will be entitled at the end of that Performance Period to a payment
that otherwise would have been made as if the Participant had been an employee of
the Company throughout the Performance Period, but prorated for the portion of the
Performance Period that the Participant was actually employed by the Company, all
as determined by the Salary Committees.



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(h) If a Participant retires on or after early retirement date under a retirement
plan of the Company or an affiliate, dies or becomes disabled during the
Performance Period, the Long-Term Award, if any, will be based on the achievement
of the Company Performance Goals for the entire Performance Period, and prorated
for the portion of the Performance Period that the Participant was actually
employed by the Company, all as determined by the Salary Committee.




(i) If a Participant engages in Detrimental Activity at any time (whether before or
after termination of employment) any Long-Term Award that has not been paid to such
Participant prior to the date such activity has been determined by the Salary
Committee to constitute Detrimental activity shall be forfeited and shall never
become payable.




	5.  	Auditor’s Letter. As soon as practicable after the end of each Performance Period,
the Salary Committee shall obtain a letter from the independent accountants who have examined
the consolidated financial statements of American Brands, Inc. (“American”) and its
subsidiaries (or, in those instances where the examination of the financial statements of the
subsidiary is conducted by the Internal Audit of American) to the effect that they have
reviewed the determination for each year of the Performance Period of the Financial Measure of
the Company and that in their view such determination has been made in accordance with
generally accepted accounting principles and accounting principles established by American
reflecting the consolidated results of operations of the Company, as such Financial Measure is
used in consolidating such results with the operating results of American and all its
consolidated subsidiaries, adjusted to exclude any extraordinary items approved by the Salary
Committee and the Parent Committee. The review made by such accountants (or the members of
the Internal Audit Department of American, as the case may be) shall include comparison of the
elements entering into the computation of the Financial Measure with the books and records of
the Company and with the consolidating adjustments made by the Company in preparing the
consolidated financial statements included in American’s annual reports to its stockholders
for the years included in the Performance Period.




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	6.  	Payments.






	 	6.1  	Source of Payment. Long-Term Awards shall be paid from the general
assets of the Company as soon as practicable after the end of the Performance Period
and the determination by the Salary Committee and Parent Committee of attainment of
the Company Performance Goals.
	 
	 	6.2  	Retention in Employment. In the event a Participant has terminated
full-time, active employment prior to the date of payment of a Long-Term Award for a
reason other than death, disability or retirement on or after early retirement date
under a retirement plan of the Company or an affiliate, no Long-Term Award shall be
paid to the Participant. Transfer from the Company to an affiliate shall not be
deemed to be a termination of employment for this purpose.
	 
	 	6.3  	Final Determination by Committee. Notwithstanding any other
provisions of the Plan, the Salary Committee may in its sole discretion determine not
to make Long-Term Award payments, or to make adjusted payments, to any or all
Participants.






	7.  	Amendment and Termination.






          (a) The Board of Directors of ACCO World Corporation shall have the power to amend the
Plan. The Salary Committee shall have no power to change the terms of any Long-Term Award
theretofore granted under the Plan so as to impair the rights of a Participant without the
consent of the Participant whose rights would be affected by such change except to the
extent, if any, provided in the Plan or in the Long-Term Award.




          (b) The Board of Directors of ACCO World Corporation may suspend or terminate the Plan
at any time.




	8.  	Withholding Taxes.





          There may be deducted from any cash payment made under the Plan any federal, state or local
income or other taxes required by law to be withheld with respect to such payment.




	9.  	Effective Date.





          The Plan shall be effective on and as of January 1, 1995.



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AMENDMENT TO ACCO WORLD CORPORATION

LONG-TERM INCENTIVE PLAN FOR KEY EMPLOYEES

(Effective as of January 1, 1995)




          WHEREAS, ACCO World Corporation (the “Company”) has established the ACCO World Corporation
Long-Term Incentive Plan for Key Employees (the “Plan”) effective as of January 1, 1995; and



          WHEREAS, the Company now desires to amend the Plan to provide for payment of Long-Term Awards
in the event of a change of control of the Company and to make certain other changes;



          NOW, THEREFORE, the Plan is amended, effective September 1, 2000, as follows:



          1. Paragraph 1 is amended in its entirety as follows:



               “1. Purpose of Plan.




          The purpose of this Long-Term Incentive Plan for Key Employees of ACCO World
Corporation (the ‘Plan’) is to aid ACCO World Corporation (the ‘Company’) and its
subsidiaries (together with the Company, referred to as the ‘Employer’) in securing
and retaining Key Employees of outstanding ability by making it possible to offer
them increased incentives to join or continue in the service of the Employer, and
to encourage Key Employees to increase their efforts for the welfare of the
Employer.”




          2. Paragraph 2(d) is amended by substituting the word “Employer” for the word “Company”
where the latter appears in that paragraph.




          3. Paragraph 2(f) is amended by substituting “Fortune Brands, Inc.” for “American Brands,
Inc.” where the latter appears in that paragraph.




          4. Paragraphs 4.3(e), (f) and (g) are amended by substituting the word “Employer” for the
capitalized word “Company” where the latter appears in such paragraphs.




          5. Section 5 is amended by substituting “Fortune Brands, Inc.” for “American Brands, Inc.”
and substituting “Fortune” for “American” wherever such terms appear in Section 5.




          6. Section 6.1 is amended in its entirety as follows:



 









 






               “6.1 Source of Payment. Long-Terms Awards shall be paid from the
general assets of the Employer as soon as practicable after the end of the
Performance Period and the determination by the Salary Committee and Parent
Committee of attainment of the Company Performance Goals.”




          7. Section 6.2 is amended by substituting the following for the first sentence:




“Subject to Section 7, in the event a Participant has terminated full-time, active
employment prior to the date of payment of a Long-Term Award for a reason other
than death, disability or retirement on or after early retirement date under a
retirement plan of the Company or an affiliate, no Long-Term Award shall be paid to
the Participant.”




          8. Sections 7, 8 and 9 are redesignated as Sections 8, 9 and 10, respectfully, and the
following new Section 7 is added to the Plan:




          “7. Change of Control.




               (a) In the event a Participant’s employment is terminated by the Company
within 18 months following a change of control (as defined in paragraph (b) below),
all Long-Term Awards shall become nonforfeitable and shall be paid out on the date
such Participant’s employment is so terminated (i) as if all Performance Periods or
other applicable conditions or restrictions had been completed or satisfied and
based on actual performance to the extent actual performance data is available for
the Performance Period and the Company’s forecast in the financial performance
outlook report for the remainder of the applicable Performance Period, but (ii)
prorated for the portion of any relevant Performance Period ending on the date such
Participant’s employment is so terminated.




               (b) For purposes of this Section 7, a ‘change of control’ is deemed to occur
if (i) any person (as that term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the ‘Exchange Act’), as in effect on
February 28, 2000) other than Fortune (or an entity controlled by Fortune) is or
becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange
Act, and the rules and regulations promulgated thereunder, as in effect on February
28, 2000) of 20% or more of the combined voting power of the outstanding voting
securities entitled to vote generally in the election of directors (‘Voting
Securities’) of the Company, and Fortune ceases to own at least 60% directly or
indirectly of the Voting Securities excluding, however (A) any acquisition



 









 






by an employee benefit plan (or related trust) sponsored or maintained by Fortune
or an entity (including the Company) controlled by Fortune, or (B) any acquisition
by an entity controlled by Fortune; (ii) the Company shall be merged or
consolidated with, or, in any transaction or series of transactions, substantially
all of the business or assets of the Company shall be sold or otherwise acquired
by, another corporation or entity unless, as a result thereof, Fortune shall
beneficially own, directly or indirectly, at least 60% of the combined Voting
Securities of the surviving, resulting or transferee corporation or entity
(including without limitation, a corporation that as a result of such transaction
owns the Company or all or substantially all of the Company’s assets either
directly or through one or more subsidiaries); or (iii) the approval of a complete
liquidation or dissolution of the Company by its stockholder(s).”




          9. Section 8 (as redesignated in item 8 above) is amended by substituting the following
for the first sentence of paragraph (a):




               “The Board of Directors of ACCO World Corporation shall have the power to amend the
Plan, except that upon a change of control (as defined in paragraph 7(b)) no
amendment of Section 7 shall be effective until 18 months following the date the
Company notifies Participants of such amendment.”



          IN WITNESS WHEREOF, the Company has caused this Amendment to be duly executed this ___day
___, 2000.



	 	 	 	 	 	 	 
	 	 	ACCO WORLD CORPORATION
	 
	

	 	By	 	 	 	 
	 	 	 	 	 
	

	 	 	 	Its