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Technology Stocks : Cabletron Systems (CS: NYSE) -- Ignore unavailable to you. Want to Upgrade?

To: Allen Scher who wrote (3174)	3/12/1998 3:41:00 PM
From: Ian@SI	Read Replies (2) \| Respond to of 8358

Re Don Reid's Compensation taking from the 10Q for the Q ending Aug 31,1977: 4. Compensation and Benefits. (a) Signing Bonus. The Company shall pay to the Executive a cash bonus of $250,000 promptly after the Effective Date. (b) Base Salary. During the Term of Employment the Company shall pay the Executive base salary at a rate of $450,000 per year, in accordance with the Company's payroll practice for executives, and subject to increase from time to time by the Board or a compensation committee of the Board, in its sole discretion. Such base salary, as from time to time increased, is hereafter referred to as the "Base Salary." Executive's Base Salary shall not be decreased from the annual rate then in effect. (c) Bonuses. During the Term of Employment, the Company shall pay the Executive quarterly cash bonuses based on increases in the Company's earnings per share ("EPS") from a fiscal quarter of one year to the corresponding fiscal quarter of the next year ("EPS Growth") (with appropriate adjustments for stock splits, dividends and the like, and excluding the effect of charges for acquisitions and non-recurring one-time charges), as follows: If EPS Growth is: the quarterly bonus is: Less than 15% $0 15% $50,000 20% $150,000 25% $250,000 30% $300,000 If EPS Growth exceeds 30%, the quarterly bonus will increase by $50,000 for each five (5) percentage point increase in EPS Growth above 30% up to a maximum quarterly bonus of $500,000. The quarterly bonus will increase proportionately between the percentage benchmarks. EPS for a quarter shall be as reported in the Company's report on Form 10-Q or Form 10-K (as the case may be) filed with the Securities and Exchange Commission ("SEC") in respect of such quarter, reduced by charges for acquisitions and non-recurring one-time charges. The quarterly bonus for a quarter in which the Term of Employment begins or ends shall be appropriately pro-rated. The quarterly bonus shall be paid within five business days following the filing of the relevant Form 10-K or Form 10-Q. (d) Stock Option. As of the Effective Date, the Executive shall be granted an option under the Company's 1989 Equity Incentive Plan (the "Plan") to purchase 600,000 shares of common stock of the Company (with appropriate adjustments for stock splits, dividends and the like) at an exercise price equal to the lower of (i) the fair market value of the stock on the trading trade prior to the date on which the Company announces by press release Executive's employment with the Company, or (ii) the fair market value of the stock on the second trading day following the date on which the Company announces by press release its financial results for the fiscal quarter ended August 31, 1997. The option will become exercisable with respect to 150,000 shares on each of the first, second and third anniversaries of the Effective Date and with respect to 75,000 shares on each of the fourth and fifth anniversaries of the Effective Date. Once exercisable, the option shall remain exercisable until the earlier of the tenth anniversary of the Effective Date or, except as provided in Sections 5(a), (b), (d), (e), (f) and (g), 90 days following termination of the Executive's employment with the Company. (e) Living and Relocation Expenses. The Company will reimburse Executive for up to $25,000 in temporary living expense in New Hampshire and will pay the reasonable out-of-pocket costs of Executive's move from New York to the New Hampshire, plus an additional payment (the "additional payment") to compensate Executive for any federal and state income taxes attributable to such reimbursements and payments and federal and state income taxes attributable to the additional payment. (f) Other Benefits. During the Term of Employment the Executive shall be entitled to a minimum of 15 days vacation, and to participate in all other employee benefit plans (including insurance plans) of the Company that cover executives of the Company generally. The Executive's participation shall be subject to (i) the terms of the applicable plan documents, (ii) generally applicable Company policies and (iii) appropriate discretion of the Board or any administrative committee contemplated by such plan, provided that Executive shall be deemed immediately eligible to fully participate in all such plans (other than tax qualified plans) notwithstanding any eligibility criteria or waiting periods. The Company may alter, modify, supplement or delete its employee benefit plans at any time as it sees fit, without recourse by the Executive. (g) Certain Expenses. The Company shall pay or reimburse the Executive for all reasonable, customary business expenses incurred or paid by the Executive in the performance of the duties and responsibilities of his position and to such reasonable substantiation and documentation as may be required by the Company.