Document:

Exhibit 10-6

Exhibit 10-6

A. T. Cross Company

Worldwide Executive Incentive Plan - 2001

 

Introduction

The following Annual Executive Compensation Incentive Plan (the "Plan") will be implemented for 2001.  The purpose of the Plan is to motivate, retain and reward managerial and executive employees for the achievement of certain business objectives.
For 2001, the Plan will be based on a combination of achievement of Operating Income Before Taxes (OIBT), Net Sales, Return on Assets and Individual Performance Objective Targets.  Individual participants in the Plan will be assigned different performance
measurements, considering their specific responsibilities and may be measured based on corporate, regional or territory results.  The combination of the performance objectives and performance targets for each participant will be determined based on
individual positions and agreed upon by the President and CEO along with the appropriate Vice President.

How the Plan Works

Participants of Groups I - V are eligible to receive a percentage of their base salary earnings as additional compensation, based on the Company's and/or individual achievement of specified performance targets consistent with the Company's business
plan.

Performance Measures

	The OIBT component of the bonus will be established at threshold level when 85% of the Operating Income Before Tax target is achieved and maximizes at 120%.

	The net sales component is established when any of the participants achieve 95% of the target and maximizes at 120%.

	The return on assets component is established when any of the participants achieve 95% of the target and maximizes at 120%.

	The individual performance objective component is established when any of the participants achieve one of his or her objectives and maximizes at 25% of the overall plan target percentage.  Three performance objectives will be assigned and weighted
1/3.  To qualify for any payout in this component, the objective must be fully and completely accomplished.  The payout is all or nothing on each objective.  Objectives will be approved by the Manager, Vice President and the President & CEO.

	Group II participants who qualify for a bonus under this plan will have a 50% reduction if they exceed their annual expense budget without prior written approval of the CEO and CFO.

Eligibility

The Compensation Committee of A. T. Cross Company may appoint - based on job content and performance - any salaried employee to be a Group I, II, III, IV or V participant in the compensation program.  Individuals are placed in Groups I - V based on
similar levels of responsibility and ability to directly impact the financial results of the Company.  Participating employees remain members until the end of the fiscal year in which they were appointed.  Eligible employees must be re-appointed to
participate each year.

Employees may participate for part of a year but must be actively employed by the Company (except in cases of death or disability) as of December 31 to be eligible for incentive awards relating to that year.

Funding Levels

	
Achievement of OIBT

Performance Goal
	
85%
	
100%
	
120%

	
Achievement of Net Sales

Performance Goal
	
95%
	
100%
	
120%

	
Achievement of Return

on Assets Performance 

Goal
	
95%
	
100%
	
120%

	 
	
Group
	
Minimum
	
Threshold Payout
	
Target

Payout
	
Maximum Payout

	
I
	
0
	
50%
	
75%
	
100%

	
II
	
0
	
20%
	
40%
	
60%

	
III
	
0
	
15%
	
30%
	
45%

	
IV
	
0
	
13%
	
25%
	
37%

	
V
	
0
	
10%
	
15%
	
25%

Payout of Plan Awards

Annual Incentive Awards will be distributed as soon as is practicable after the close of the fiscal year.  Awards will be made as a percent of base salary paid for that year.  Base salary does not include any bonus payable under this Plan or any
other incentive plan, any life insurance premiums, special compensation, pension benefits, profit sharing trust or Crossaver savings plan matching allocations.

Performance results that fall between threshold, target and maximum levels will yield the comparable interpolated funding levels.

Changes in Employment Status

Employees who are participants in the Plan for only part of a fiscal year may participate in the Plan for the period or periods of membership on a pro rata basis.  Bonuses will be prorated for employees who participate in more than one bonus level
during the year, considering all bonus levels.  However, participants must be actively employed by the Company as of December 31 to be eligible for incentive awards relating to that year.

Disability or Death

For participants who become disabled (i.e., eligible for Company LTD benefits) or die while a member of the Plan, awards will be determined in a pro-rated manner to reflect the period of time the participant was an active member of the Plan.
Payout will be made - at the time the normal payout would have been made - to the participant or participant's beneficiary(ies) if on file; otherwise, payment will be made to the participant's estate.

Administration

The Compensation Committee of the Board of Directors of A. T. Cross Company, whose decisions in all matters will be final, will administer the Plan.  The Committee reserves the right, subject to the full Board's approval, to modify, amend, or
discontinue this Plan at any time.  Any changes or amendments to the Plan will not affect a participant's rights prior to the modification unless the participant provides written consent.

Participation in this Plan does not confer any right to continued employment by A. T. Cross.  Similarly, selection for participation in any one year does not necessarily guarantee participation in future years.  No member of the Compensation Committee
shall have any personal liability in connection with the administration of the Plan.  

Definitions

Operating Income Before Taxes (OIBT)

OIBT is defined as the pretax operating income.  It excludes any adjustment for LIFO inventories, and is before profit or loss on the disposition of fixed assets, before restructuring or other non-recurring charges and before allowance for bonus
payment under this plan.  The corporate target will be approved by the Board of Directors considering the annual operating plan.

Net Sales

Net Sales is defined as gross sales of the unit, less returns and allowances, cash discounts, and rebates.

Return on Assets

Return on Assets is defined as net income divided by average total assets (2 point average.)

Territory

The three territories are: 1.) Europe, Middle East and Africa, 2.) Asia and 3.) The Americas.

Region

Is defined as the individual participant's assigned area of responsibility.

International Calculations

Participants who are located internationally will have their targets and actual results determined utilizing budgeted exchange rates.  By utilizing budgeted exchange rates, there will be neither a favorable or unfavorable impact as a result of
fluctuations in foreign exchange.  Also, participants who operate in a single country will be measured using local currency, while participants who operate in multiple countries will be measured in U.S. dollars (utilizing budgeted exchange rates) on a
consolidated basis.Exhibit 10-7

Exhibit 10-7

(Note: Portions of this exhibit have been omitted pursuant to a request for confidential treatment.  The information omitted has been filed separately with the Securities and Exchange Commission.)

 
May 15, 2000

Mr. John E. Buckley

One Kings Row

Cumberland, Rhode Island 02864

Dear John:

This letter will set forth the terms and conditions pursuant to which A.T. CROSS Company will enter into a consulting arrangement with you.

You have indicated that as of June 30, 2000, your employment with A.T. CROSS Company will terminate.  At that time, and assuming that you sign the form of Separation Agreement and General Release provided by the Company, the severance benefits
described in Russell A. Boss's letter to you dated August 17, 1999 (a copy of which is attached hereto) will commence.  With respect to those options you have received as an employee, you will have ninety (90) days following June 30, 2000 to exercise any
vested (as of June 30, 2000) and unexpired incentive stock options and twelve (12) months following June 30, 2000 to exercise any vested (as of June 30, 2000) and unexpired nonqualified stock options.

Any Restricted Stock previously granted to you which has not vested as of June 30, 2000 will be forfeited.

You will continue to receive health, dental and universal life insurance coverage to age 65.

Your consulting arrangement with the Company will commence on July 1, 2000 and will be further evidenced by a written Consulting Agreement.  Pursuant to the arrangement, you will continue to seek out revenue generating opportunities for the Pen
Computing Group, including in particular, NetPen opportunities.  Your title will be President, Pen Computing Group, and you will continue to be directly supported by two CROSS employees and other CROSS functions as needed.  You will continue to report to me
 .

In exchange for the services you agree to provide pursuant to the consulting arrangement, CROSS agrees to pay you the following:

From July 1, 2000 to December 31, 2000, CROSS will pay you a fee of $162,500 (the "Fee") which will be paid in equal monthly installments.

The term of the consulting arrangement will be for six (6) months from July 1, 2000 to December 31, 2000 (the "Term").  In the event that the Board of Directors determines at any time during the Term that there is not a viable future for the NetPen
project or the Pen Computing Group, it shall have the right to terminate the consulting arrangement with thirty (30) days' notice.  Notwithstanding the foregoing, in the event that the Consulting Agreement is terminated by the Board prior to December 31,
2000, the Company agrees to pay you the remaining Fee that would have otherwise been payable to you through December 31, 2000, plus a termination fee of $135,420.  In the event that the CROSS Board of Directors determines to continue the PCG business
prior to the end of the Term, it shall renew the consulting arrangement with you for a twelve (12) month period (the "Renewal Term").  For the purposes of determining whether the Consulting Agreement is renewed with you, the PCG business shall only be
deemed to be continued by the Board of Directors if the following occurs:

	
(i)
	
the PCG revenue plan for 2001 must exceed 25% of the QWI revenue plan for 2001; and

	
(ii)
	
the Board of Directors must have accepted the PCG 2001 Plan and must have agreed to commit increased resources to the PCG business; and

	
(iii)
	
CROSS's role in the PCG business must be more than merely a contract manufacturer.

If the foregoing does not occur, the Consulting Agreement will not be automatically renewed.

If the Consulting Agreement is renewed, you will be paid $325,000 for the Renewal Term plus the average percentage increase given to members of the Operations Committee.  If the Consulting Agreement is terminated by the Board prior to the end of the
Renewal Term, CROSS agrees to pay you the balance of the $325,000 not yet paid for 2001.  Bonus opportunities for the Renewal Term will be agreed by the parties.

You will be provided with a monthly car and gas allowance of $1,000 through December 31, 2000 after which you will start to receive the car allowance you would have received pursuant to the Russell A. Boss letter, unless your consulting arrangement is
extended by the Board as described herein, in which case the car allowance paid pursuant to the Consulting Agreement will continue.  You will not commence receiving the car allowance provided for in Russell Boss's letter until your Consulting Agreement is
terminated.

In addition, you will be provided with an opportunity to earn a bonus equal to up to 40% of the Consulting Services Fee if you accomplish the following by December 31, 2000:  (For the purpose of determining the bonus opportunities set forth below in
paragraphs 1, 2, 3 and the paragraph on achieving operating income before taxes, the Consulting Services Fee will be deemed to be $325,000.)

 

	
1.
	
If you successfully negotiate CROSS's participation (the "Participation") in the deal currently being negotiated between [XXXX] and [XXXX] identical to what CROSS would have received in the deal previously contemplated with [XXXX] you will earn an
amount equal to 40% of the bonus, or 16% of your Consulting Services Fee.  A Participation will be achieved if a) CROSS receives 5.6% of the total price that [XXXX] receives from [XXXX] either in cash or in equity in NewCo; b) CROSS is the exclusive OEM
manufacturer of pens and other non-tethered styli as set forth in the Agreement between CROSS and [XXXX] dated June 1999 for NewCo; c) NewCo must agree to pursue third party infringers of CROSS's rights and of the [XXXX] intellectual property; d) CROSS
will receive [XXXX] for surrendering its rights under the [XXXX] Agreement to NewCo; and e) NewCo agrees to feature CROSS in all of the packaging, advertising, publications, and public relations related to the [XXXX] business, and in particular, inserts
in the [XXXX] mailer.

	
2.
	
If you a) lead and operate the NetPen business;  b) drive and execute the Vantis test market;  c) drive and execute the Forbes test market; and  d) achieve the 2000 Operating Budget (attached), you will receive an amount equal to 20% of the bonus, or
8% of your Consulting Services Fee.

	
3.
	
If the Board approves a continuation of the consulting arrangement, and you agree to such continuation, beyond December 31, 2000, you will receive an amount equal to 40% of the bonus, or 16% of your Consulting Services Fee.

 

Within fifteen (15) days of February 3, 2001 the Company will provide you with a cash payment equal to the fair market value of 6,667 shares of A.T. CROSS Class A common stock on February 3, 2001.  In the event that the Board approves the continuation
of your agreement through 2001, the Company will provide you with a cash payment equal to the fair market value of 13,333 shares of A.T. CROSS Class A common stock on February 3, 2002.

Further, the Company agrees that it will grant you rights to the appreciation on 67,152 units of phantom stock.  You will be entitled to take the appreciation on such phantom units any time within five (5) years of July 1, 2000.  The baseline fair
market value used to determine future appreciation will be the fair market value on July 1, 2000.  For example, if the fair market value of CROSS Class A common stock is $6.00 on July 1, 2000 and you decide to cash out the appreciation on all the units on
July 1, 2001 and the fair market value is $8.00 on that date, you will be entitled to a payment equal to 67,152 X $2.00 or 134,304.   You may take the appreciation on some or all of the phantom units throughout the five (5) year period.

Finally, if the operating income before taxes for the Pen Computing Group for the prior twelve (12) months equals or exceeds $1,000,000 on December 31, 2000 you will receive an amount equal to 10% of the Consulting Services Fee.  If the OIBT for the
Pen Computing Group equals or exceeds $2,000,000 on December 31, 2000 you will receive an additional amount equal to 10% of your Consulting Services Fee.

In the event that you voluntarily terminate your services to CROSS at any time during the Term or Renewal Term, you agree to provide the Company with three (3) months' notice.  At its discretion, CROSS shall have the option to ask you to provide
services during that three-month period.  If you are asked to provide services, you will be paid for that time.

If you voluntarily terminate, you will forfeit your right to any remaining fees to be paid during the Term or Renewal Term, as well as any bonus opportunities.  In addition, if you terminate prior to December 31, 2000, you will forfeit your right to
the cash payments (described above) equal to the fair market value of 6,667 shares which were to be made on February 3, 2001, and the cash payment equal to the fair market value of 13,333 shares which was to be made on February 3, 2002, assuming the
conditions described herein had been met.  If you voluntarily terminate after December 31, 2000 but before December 31, 2001, you will lose your right to the cash payment equal to the fair market value of 13,333 shares which was to be made on February 3,
2002, assuming the conditions described herein had been met.

If you agree with the foregoing terms and conditions, please so signify by signing below.  A draft of a Consulting Agreement will be forwarded to you for your review in the next several weeks.

	
Very truly yours,

	 
	
By /s/ DAVID G. WHALEN

(David G. Whalen)

President and Chief Executive Officer

 

Agreed and Accepted:

By /s/ JOHN E. BUCKLEY

(John E. Buckley)

 

 
June 29, 2000

Mr. John E. Buckley

John E. Buckley, LLC

One Kings Row

Cumberland, Rhode Island 02864

Dear John:

This letter will amend the Consulting Agreement between CROSS and John E. Buckley, LLC dated July 1, 2000 and the Letter Agreement between CROSS and John E. Buckley dated May 15, 2000 (collectively, the "Agreement").  The Agreement provides that John
E. Buckley will cease to be an employee of CROSS on June 30, 2000 and will enter into a Consulting Agreement with CROSS on July 1, 2000.

You agree that, at the discretion of David Whalen, you will continue as an employee of CROSS beyond June 30, 2000, but in no event later than December 31, 2000.  Dave will notify you when your employment status will end and your consultant status will
begin.  In the event that you continue as a CROSS employee beyond June 30, 2000, your Consulting Agreement with CROSS will not commence until the day after your last day as an employee of CROSS.  You will continue to be paid and otherwise treated as an
employee of CROSS for the time period that your employment is extended beyond June 30, 2000.  You will not commence receiving severance benefits until your employment ceases, and the time to exercise your stock options will not start to run until you are
no longer an employee.  Further, you will not forfeit unvested Restricted Stock until your employment terminates.  In the event that your employment does not end until December 31, 2000 and your consulting status does not commence, CROSS agrees and
acknowledges that you are entitled to the termination fee of $135,420 as described in the Letter Agreement.

For each month that your employment is extended beyond June 30, 2000, your Fee as a Consultant will be reduced by $27,083.33, or a pro rata portion thereof as appropriate if not in full month increments.  While you are an employee, you will continue to
receive your car and gas allowance that you have been receiving as an employee but will not receive the car and gas allowance as a consultant until the Consulting Agreement commences.

In all other respects, the terms and conditions of the Agreement will remain unchanged, including the determination of the baseline valuation of the phantom stock grant set forth in the Letter Agreement.

If you agree with this amendment to the Agreement, please so signify by signing the enclosed duplicate copy of this letter and returning it to me.

	
Very truly yours,

	
By: /s/ DAVID G. WHALEN

(David G. Whalen)

President and Chief Executive Officer

 

Agreed and Accepted:

	
By /s/ JOHN E. BUCKLEY

(John E. Buckley)
	
June 29, 2000

Date

	 	 

JOHN E. BUCKLEY, LLC

	
By /s/ JOHN E. BUCKLEY LLC

(John E. Buckley)
	
June 29, 2000

Date

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