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                                                                 EXHIBIT 10 (tt)



                    TLC BEATRICE INTERNATIONAL HOLDINGS, INC.

                           1996 ANNUAL INCENTIVE PLAN

                  (As Adopted Effective as of January 19, 1996)










                                  (Final Plan)







 

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                    TLC BEATRICE INTERNATIONAL HOLDINGS, INC.

                           1996 ANNUAL INCENTIVE PLAN

                  (As Adopted Effective as of January 19, 1996)


        1.  Effective  Date and Purpose.  TLC BEATRICE  INTERNATIONAL  HOLDINGS,
INC., a Delaware  corporation (the "Company"),  has established the TLC Beatrice
International Holdings, Inc. 1996 Annual Incentive Plan (the "Plan"),  effective
as of January 19,  1996 (the  "Effective  Date").  The purpose of the Plan is to
promote  the  long-term  financial  performance  of the  Company by  attracting,
retaining, and motivating officers, executives, managers and other key employees
of  the  Company  and  its   subsidiaries   by  providing  them  with  incentive
compensation  opportunities.  Each  participant's  award will take into  account
corporate  performance as well as, where appropriate,  his or her own individual
performance.

        2.  Plan   Administration.   The  Plan  shall  be  administered  by  the
Compensation  Committee of Board of Directors of the Company (the  "Committee").
In addition to those rights, duties, and powers vested in the Committee by other
provisions of the Plan, the Committee shall have sole authority to:

        (a)    interpret the provisions of the Plan;

        (b)    adopt,   amend  and  rescind  rules  and   regulations   for  the
               administration of the Plan; and

        (c)    make all other  determinations  deemed by it to be  necessary  or
               desirable for the administration of the Plan.

        The Committee  shall exercise its authority only by a majority vote at a
meeting or by written consent of a majority without a meeting.

        3.  Eligibility.  Only  individuals who are (i) active  employees of the
Company, its subsidiaries or affiliates ("Active Employees") and (ii) designated
as  participants  under the Plan for any Year (as defined  below) in  accordance
with the terms  hereof,  may  participate  in the  Plan.  Each  Year,  the Chief
Executive  Officer of the Company ("CEO"),  or such other persons as the CEO may
designate,  shall  provide to the  Committee  a list of those  Active  Employees
recommended  for   participation  in  the  Plan  for  that  Year   ("Recommended
Employees").  The Committee  shall review the list of Recommended  Employees and
may make any additions and  deletions to the list of  Recommended  Employees the
Committee deems  appropriate.  The Active Employees so approved by the Committee
shall  become  participants  under  the  Plan for  that  Year  ("Participants").
Notwithstanding  the foregoing,  the Committee may, at any time and from time to
time, add to or



 

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delete individuals from the list of Participants in its sole discretion. As soon
as reasonably  practicable,  each person who is a Participant  in the Plan for a
Year will be notified of such  participation  and his or her  Individual  Target
Award (as hereinafter  defined).  As used herein, the term "Year" shall mean the
fiscal year of the Company.

        4.     Individual Target Awards.

               (a) At the beginning of each Year, an individual target award (an
        "Individual  Target Award") shall be established  for each  Participant.
        Establishment  of an Individual  Target Award for a Participant  for any
        Year shall not imply or require that an  Individual  Target Award be set
        for any  subsequent  Year and the amount of any actual award paid to any
        Participant  (an  "Award")  may be greater  or less than the  Individual
        Target Award.  The  establishment  of an  Individual  Target Award for a
        Participant shall not affect the right of the Company,  its subsidiaries
        or affiliates to terminate,  with or without cause,  such  Participant's
        employment at any time.

               (b)  Individual  Target  Awards  shall  be a  percentage  of  the
        Participant's  base salary reviewed and approved by the Committee in its
        sole discretion.  It is contemplated  that Individual Target Awards will
        vary by Company  position  and  responsibility  and shall range from ten
        percent (10%) to seventy-five percent (75%) of base salary.

        5.  Basis  of  Awards.  The  payment  of an  Award  will be based on the
following factors:

               (a)  the  Company's   achievement   of  targeted   earnings  from
        operations (excluding  non-recurring items) established at the beginning
        of each Year by the CEO through the annual business planning process and
        reviewed by the Committee (the "Target Earnings");

               (b)   the   Company's   achievement   of   any   other   special,
        non-recurring,  strategic  or other  performance  factors  which the CEO
        shall deem appropriate and as approved by the Committee; and

               (c) the individual performance of each Participant.

        6.     Award Determination.

               (a) The  maximum  amount  of  funds to be made  available  by the
        Company for the purpose of paying Awards (the "Maximum  Available  Award
        Funds") shall be a percentage of the aggregate  amount of all Individual
        Target Awards  established at the commencement of a Year (the "Incentive
        Award Pool"), which percentage shall based on the Company's  achievement
        of the Target Earnings as set forth on the following schedule:


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                      (i) if the Company's earnings are less than eighty percent
               (80%) of the Target Earnings,  the Maximum  Available Award Funds
               shall be zero (0);  provided,  however,  that the CEO may request
               approval  from  the  Committee  to make  available  up to  thirty
               percent (30%) of the Incentive  Award Pool for purposes of paying
               Awards at the discretion of the CEO;

                      (ii) if the Company's  earnings are between eighty percent
               (80%) and one hundred percent (100%) of the Target Earnings,  the
               Maximum Available Award Funds shall be an amount equal to (A) one
               hundred  percent (100%) of the Incentive Award Pool minus (B) the
               percentage of the Incentive  Award Pool determined by multiplying
               2.5 by the percent by which the Company's  earnings are less than
               the Target Earnings;

                      (iii) if the Company's earnings exceed one hundred percent
               (100%)  and are less  than or equal  to one  hundred  twenty-five
               percent  (125%) of the Target  Earnings,  the  Maximum  Available
               Award Funds shall be equal to (A) one hundred  percent  (100%) of
               the Incentive Award Pool plus (B) the percentage of the Incentive
               Award Pool  determined  by  multiplying 2 by the percent by which
               the Company's earnings exceed the Target Earnings; and

                      (iv)  if  the  Company's   earnings   exceed  one  hundred
               twenty-five  percent (125%) of the Target  Earnings,  the Maximum
               Available Award Funds shall be equal to one hundred fifty percent
               (150%) of the Incentive Award Pool.

               Notwithstanding the provisions of Section  6(a)(i)-(iv) above, in
        any  Year,  in the event  that the  Company's  earnings  are equal to or
        greater than eighty  percent (80%) of the Target  Earnings,  the CEO may
        request  approval from the  Committee  and the Committee  shall have the
        right  to  make  available  to the  CEO an  additional  amount  of up to
        twenty-five  percent  (25%) of the  Incentive  Award Pool,  which amount
        shall be a discretionary bonus pool payable at the discretion of the CEO
        to any employee as an additional  bonus to any Award  otherwise  payable
        hereunder.

               The  percentage  adjustment  to the  Incentive  Award  Pool under
        Sections   6(a)(i)-(iv)  above  when  combined  with  any  discretionary
        percentage  increase  to the  Incentive  Award Pool as  provided in this
        Section  6(a)  is  hereinafter   referred  to  as  the  "Net  Percentage
        Adjustment."

               (b) The  amount of the Award to be paid to each  Participant,  if
        any, shall be determined by the Committee as follows:


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                      (i)  first,  the amount of each  Participant's  Individual
               Target Award shall be multiplied by the Net Percentage Adjustment
               as determined pursuant to Section 6(a);

                      (ii)  second,  the  amount so  determined  may be  further
               increased or decreased,  in the sole discretion of the Committee,
               based on a Participant's  individual performance during the Year;
               and

                      (iii) third, the resulting amount may be further increased
               or decreased,  in the sole discretion of the Committee,  based on
               factors   such  as  the   Company's   cash   flow   requirements,
               restrictions  under the Company's  debt  obligations or any other
               factor the Committee deems appropriate.

               (c)  The  combination  of the  determinations  made  pursuant  to
        Section 6(b) may result in a Participant receiving an Award in excess of
        or less than such  Participant's  Individual  Target Award or may reduce
        such  Award to zero;  provided,  however,  that in no  event  shall  the
        aggregate of the Awards payable to all  Participants  in any Year exceed
        the Maximum  Available Award Funds for that Year. The  determination and
        approval of all Awards shall be in the sole  discretion of the Committee
        acting in accordance with the terms hereof.

        7. Payment of Awards. Awards paid under this Plan shall be paid from the
general assets of the Company.

        8.  Employment at Year End. No Award for any given Year shall be made to
any  Participant  who is not an active  employee  of the  Company  or one of its
subsidiaries  or affiliates at the end of such Year,  except those  Participants
whose active employment ended during such Year because of death, disability,  or
retirement  under one of the Company's  retirement  plans,  or unless  otherwise
agreed in writing by the Committee.

        9. Assignment.  The interest of any Participant under the Plan shall not
be assignable  either by voluntary or involuntary  assignment or by operation of
law.

        10.   Amendment.   While  the  Company   hopes  to  continue   the  Plan
indefinitely,  it reserves the right in its Board of Directors to amend, suspend
or terminate the Plan or adopt a new plan at any time; provided,  however,  that
no such amendment shall  retroactively  and adversely  affect the payment of any
Award  previously  made. In case any one or more of the provisions  contained in
the Plan shall for any reason be held to be invalid, illegal or unenforceable in
any respect,  such invalidity,  illegality or unenforceability  shall not affect
any other  provision  of the Plan,  but the Plan shall be  construed  as if such
invalid, illegal or unenforceable provisions had never been contained herein.


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        11. Plan Not  Contract of  Employment.  The Plan does not  constitute  a
contract of employment.  Eligibility  to receive,  or receipt of, an Award under
the Plan does not give any  individual the right to become or remain an employee
of the  Company  or any of its  subsidiaries  and does not  limit in any way the
right of the Company to change the duties or responsibilities of any employee.

        12.  Governing  Law.  The Plan shall be  governed  by and  construed  in
accordance with the laws and court decisions of the State of New York.



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