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Bowen and Wallace EXHIBIT 6 (Continued) Selected leases treated as operating leases for financial reporting, 19902004: Rent expense $850 os $1,230 If these leases
Bowen and Wallace EXHIBIT 6 (Continued) Selected leases treated as operating leases for financial reporting, 19902004: Rent expense $850 os $1,230 If these leases were capitalized, it would affect assets and amortization expense traceable to each division as follows: Pro forma amounts as of 1/1/90, as if selected operating leases were capitalized as that date and related annual lease amortization for the period, 1990-2004: Capitalized lease asset, net of amortization to date Annual lease amortization expense $8,125 os $3,600 360 $11,725 Lease amortization expense is estimated using the straight-line method. Interest ex- pense related to these leases is not provided because interest expense is not allocated to divisions. To: From: Re: Date: EXHIBIT 7 Interior Systems, Inc. Engagement Letter B.A. Consulting Teams Bill president and CEO Revised metric for Division performance Evaluation and Senior Management Incentive Compensation April 9, 1996 As discussed earlier, the purpose of this engagement is to have you investigate several issues surrounding our potential adoption Of an EVA'-based scheme for division per- formance evaluation and senior management incentive compensation. We Will be meet- ing soon With representatives Of Stern Stewart, a consulting firm that has successfully marketed EVA', to a number 01 leading corporations including Briggs & Stratton, Coca-Cola and Eli Lilly. These corporations seem happy With EVAI and feature it in their annual reports to shareholders. Since Stern Stewart has a vested interest in their product, we feel it prudent to seek independent advice to prepare for our meeting With their representatives. We would like you to provide us With an overview Of the benefits and drawbacks or switching from our existing performance metric (division earnings) to one based on division EVA', On balance, is the proposed change to EVAS- based performance evaluation a good idea? yes. would it work equally well for each Of our divisions (Airline Interiors and Office Solutions)? We seek your assistance in the following areas:
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