(a) "AWARD" means, with respect to each Participant, the award determined for a Performance Period. Each Award is determined by a formula for a Performance Period, subject to the Committee's authority under 6(e) to reduce the Award otherwise payable.
(b) "BOARD" means the Board of Directors of the Company.
(c) "COMMITTEE" means the Compensation Committee of the Board, or a sub-committee of the Compensation Committee, which shall consist solely of two or more members of the Board who are not employees of the Company and who otherwise qualify as "outside directors" within the meaning of Section 162(m).
(d) "COMPANY" means Monaco Coach Corporation.
(e) "COVERED EMPLOYEE" means a "covered employee" within the meaning of Section 162(m).
(f) "PARTICIPANT" means an eligible executive of the Company participating in the Plan for a Performance Period.
(g) "PERFORMANCE-BASED COMPENSATION" means compensation that is intended to qualify as "performance-based compensation" within the meaning of Section 162(m).
(h) "PERFORMANCE PERIOD" means the time period with respect to which an Award is earned and paid. Performance Periods under the Plan shall be annual, semi-annual and/or quarterly periods.
(k) "SECTION 162(m)" means Section 162(m) of the Internal Revenue Code of 1986, as amended, or any successor to Section 162(m), as that Section may be interpreted from time to time by the Internal Revenue Service, whether by regulation, notice or otherwise.
(a) The Committee shall be responsible for the general administration and interpretation of the Plan and for carrying out its provisions. The Committee may delegate specific administrative tasks to Company employees or others as appropriate for proper administration of the Plan. Subject to the limitations on Committee discretion imposed under Section 162(m), the Committee
(i) discretionary authority to construe and interpret the terms of the Plan, and to determine eligibility, Awards and the amount, manner and time of payment of any Awards hereunder;
(ii) to prescribe forms and procedures for purposes of Plan participation and distribution of Awards; and
(iii) to adopt rules, regulations and bylaws and to take such actions as it deems necessary or desirable for the proper administration of the Plan.
(b) All decisions of the Committee are subject to ratification by the Board.
(c) Any rule or decision by the Committee that is not inconsistent with the provisions of the Plan shall be conclusive and binding.
4. ELIGIBILITY. The employees eligible to participate in the Plan for a given performance Period shall be all executive officers and other key employees of the Company designated by the Committee who are or may reasonably be expected to become Covered Employees, as determined by the Committee in its sole discretion. No person shall be automatically entitled to participate in the Plan.
5. PERFORMANCE TARGETS. For each Performance Period the Committee shall establish Company performance measures and objectives as provided herein. Such performance measures and objectives shall be established in writing in advance of such date as is permitted by Section 162(m). A Participant's bonus opportunity shall become payable as an Award based upon the extent to which the Company meets or exceeds such pre-established performance measures.
(a) PERFORMANCE MEASURES. The primary measure of Company performance shall be earnings before interest, taxes, depreciation and amortization (EBITDA).
6. AWARD PAYMENT.
(a) CERTIFICATION. The Committee shall certify in writing that all of the applicable performance criteria have been met prior to any payments under this Plan.
(c) TIMING OF DISTRIBUTIONS. Subject to Sections 6(d) and (e) below, the Company shall distribute amounts payable to Participants as soon as is practicable following the determination of the Award for a Performance Period.
(d) DEFERRAL. The Committee may defer payment of Awards, or any portion thereof, to Covered Employees as the Committee, in its discretion, determines to be necessary or desirable to preserve the deductibility of such amounts under Section 162(m). In addition, a Participant may, subject to such terms and conditions as the Committee may prescribe, elect to defer payment of all or a portion of his or her Award.
(e) LIMITATIONS. The Committee may not increase a Covered Employee's Award(s), but may, in its sole discretion, decrease a Covered Employee's Award(s).
9. TERMINATION OF EMPLOYMENT.
(a) In the event that a Participant's employment with the Company terminates by reason of the Participant's retirement, total and permanent disability or death, the Committee may, in its discretion, pay to the Participant or the Participant's representative, as the case may be, all or a portion of the Award for the Performance Period in which such termination occurs.
(b) No Award shall be paid to a Participant whose employment terminates during a Performance Period except as provided in Section 9(a) above.
10. WITHHOLDING. Distributions pursuant to this Plan shall be subject to all applicable federal and state tax and withholding requirements.
11. EMPLOYMENT. This Plan does not constitute a contract of employment or compensation or impose on either the Participant or the Company any obligation to retain the Participant as an employee. This Plan does not change the status of the Participant as an employee at will, the policies of the Company regarding termination of employment, nor guarantee further continuing participation in the Plan.
12. SUCCESSORS. The provisions of this Plan shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. The Plan replaces any other variable compensation plan for the Participants.
13. NONASSIGNMENT. The rights of a Participant under this Plan shall not be assignable or transferable by the Participant except by will or the laws of intestacy.
LAW. The Plan shall be governed by the laws of the State