SENIOR EXECUTIVE INCENTIVE
(As Amended and Restated Effective January 1, 2005)
1. PURPOSE OF THE
2. DEFINITIONS. For purposes of this Plan, the following terms shall have the meanings set forth below:
2.1 "Committee" means the Compensation and Benefits Committee of the Company's Board of Directors, or any successor thereto or delegate thereof with the authority to act on behalf of the Committee with respect to this Plan.
2.2 "Corporate Performance Measures" means specified levels of earnings per share, the attainment of a specified price of the Company's common stock, specified levels of earnings before interest expense and taxes, operating profit, return to stockholders (including dividends), return on equity, earnings, revenues, market share, cash flow, cost reduction goals, economic value added, or any combination of the foregoing, as selected by the Committee for a specified performance or measurement period for purposes of this Plan, and as such measures may be adjusted for major nonrecurring and non-operating expense and income items, as determined by the Company and as acceptable to the Committee in its sole discretion, based on the facts and circumstances involved, as determined pursuant to generally accepted accounting principles, and as consistently applied by the Committee.
2.3 "Division or Business Unit Performance Measures" mean specified levels of revenue, operating profit, market share, pretax return on total capital, cost reduction goals, economic value added, or any combination of the foregoing, as selected by the Committee for a specified performance or measurement period for purposes of this Plan, and as such measures may be adjusted for major nonrecurring and non-operating expense and income items, as determined by the Company and as acceptable to the Committee in its sole discretion, based on the facts and circumstances involved, as determined pursuant to generally accepted accounting principles, and as consistently applied by the Committee.
2.4 "Incentive Award" means an incentive compensation award paid to a Participant pursuant to the Plan.
2.5 "Participant" means the Company's Chief Executive Officer and any executive officer of the Company who reports directly to the Company's Chief Executive Officer and who is identified as eligible to participate in this Plan for a given Plan Year by the Committee or who is hired, transferred,
or promoted to an eligible position during a Plan Year and is identified as eligible to participate in the Plan by the Committee.
2.6 "Plan Year" means a period of one year, commencing each January 1 and ending on the following December 31, or such other twelve consecutive month period as may be established from time to time by the Company. Subject to shareholder approval of the Plan, the first Plan Year of the Plan shall be the one year period commencing on January 1, 2005 and ending December 31, 2005.
3. ESTABLISHMENT OF
3.1 The payment of Incentive Awards to Participants under the Plan shall be determined by the extent to which the selected Corporate Performance Measures and, if appropriate in its discretion, the selected Division or Business Unit Performance Measures have been attained in relation to a target incentive level (the "Target Incentive Level") established for each Participant for each Plan Year. No later than 90 days after the beginning of any Plan Year, the Committee shall (a) select and publish Corporate Performance Measures and, if appropriate in its discretion, Division or Business Unit Performance Measures to be applied for such Plan Year, (b) select and publish the Target Incentive Level expressed as a dollar amount of incentive compensation for each Participant for such Plan Year, and (c) specify the percentage of such Target Incentive Level that shall be payable as a result of the attainment of the Corporate Performance Measures and, if applicable, the Division or Business Unit Performance Measures. The Committee shall establish threshold performance levels which must be achieved at the corporate level and the division/business unit level (if applicable) before any Incentive Award shall be payable under this Plan. Notwithstanding any provision of this Plan to the contrary, the maximum Incentive Award payable to the Company's Chief Executive Officer under this Plan for any Plan Year shall be $3,000,000, and the maximum Incentive Award payable to any other Participant in this Plan for any Plan Year shall be $1,500,000.
3.2 As soon as practicable following the end of each Plan Year, the Committee shall determine the degree to which the Corporate Performance Measures and the Division or Business Unit Performance Measures (if applicable) have been met for such Plan Year in relation to the applicable Target Incentive Levels for purposes of determining the amounts of any Incentive Awards payable under the Plan. If the applicable measures are satisfied at or above the threshold performance levels established by the Committee, the Committee shall so certify in a written statement and shall authorize the payment of Incentive Awards in accordance with the terms of the Plan; provided, however, that notwithstanding the foregoing, the Committee shall have the sole and absolute discretion to reduce (but not increase) the amount of any Incentive Award otherwise payable under the Plan or to determine that no Incentive Award shall be payable to a Participant under the Plan (so long as the exercise of such negative discretion does not result in an increase in the Incentive Award payable to any other Participant). Under no circumstances shall any Incentive Award be deemed earned by or payable to a Participant under this Plan with respect to any Plan Year unless and until the Committee both certifies the attainment of all applicable Performance Measures and exercises its discretion to determine whether an Incentive Award shall be paid to each such individual Participant with respect to such Plan Year.
4. PAYMENT OF INCENTIVE AWARDS. Payment of Incentive Awards, less withholding taxes and other applicable withholdings, shall be made to Participants not later than March 15 following the applicable Plan Year, provided the Committee has certified that the applicable Performance Measures have been satisfied and has determined the amount and approved the payment of the Incentive Award to the Participants. Funding of Incentive Awards under this Plan shall be out of the general assets of the Company. Unless otherwise determined by the Committee in its discretion, Incentive Awards shall be paid in cash.
5. ADMINISTRATION. The Plan shall be administered by the Committee, which shall have full power and authority to interpret, construe and administer the Plan in accordance with the provisions set forth herein. The Committee's interpretation and construction of the Plan, and actions hereunder, or the amount or recipient of the payments to be made from the Plan, shall be binding and conclusive on all persons for all purposes. In this connection, the Committee may delegate to any corporation, committee or individual, regardless of whether the individual is an employee of the Company, the duty to act for the Committee hereunder. No officer or employee of the Company shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to his or her own willful misconduct or lack of good faith. The expenses of administering the Plan shall be paid by the Company and shall not be charged against the Plan.
6. PARTICIPATION IN
7. TERMINATION OF EMPLOYMENT. Unless otherwise determined by the Committee, a Participant whose employment in his current position with the Company terminates for any reason prior to the end of a Plan Year shall not be entitled to receive an Incentive Award for such Plan Year.
8. DEFERRAL OF INCENTIVE AWARDS. A Participant may elect to defer receipt of all or any portion of any Incentive Award made under this Plan to a future date as provided in and subject to the terms and conditions of any deferred compensation plan of the Company.
9.1 NONTRANSFERABILITY. No Incentive Award payable hereunder, nor any right to receive any future Incentive Award hereunder, may be assigned, alienated, sold, transferred, anticipated, pledged, encumbered, or subjected to any charge or legal process, and if any such attempt is made, or a person eligible for any Incentive Award hereunder becomes bankrupt, the Incentive Award under the Plan which would otherwise be payable with respect to such person may be terminated by the Committee which, in its sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such person or make any other disposition of such award that it deems appropriate.
9.2 CLAIM TO INCENTIVE AWARDS
9.3 INCOME TAX WITHHOLDING/RIGHTS OF OFFSET. The Company shall have the right to deduct and withhold from all Incentive Awards all federal, state and local taxes as may be required by law. In addition to the foregoing, the Company shall have the right to set off against the amount of any Incentive Award which would otherwise be payable hereunder, the amount of any debt, judgment, claim, expense or other obligation owed at such time by the Participant to the Company or any subsidiary.
LAW. All questions pertaining to the construction,
validity and effect of the Plan shall be determined in accordance with the laws
of the State of
11. EFFECTIVE DATE. The Plan shall not become effective unless and until it is approved by the Company's shareholders, and upon such approval shall become effective for the Plan Year in which such approval occurs and each subsequent Plan Year.