Exhibit 10.1
COLFAX CORPORATION
ANNUAL INCENTIVE
PLAN
Subject to
approval of the Plan by shareholders, Colfax Corporation, a
Delaware corporation (the “Company”) hereby adopts the
terms of its Annual Incentive Plan (the “Plan”), as
follows:
1. PURPOSE
The Plan is
intended to enhance the Company’s and its Affiliates’
(as defined herein) ability to attract and retain highly qualified
officers and key employees, and to motivate such persons to serve
the Company and its Affiliates. Remuneration payable under the Plan
is intended to constitute “qualified performance-based
compensation” for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended and Section 1.162-27 of the
Treasury Regulations thereunder and the Plan shall be construed
consistently with this purpose.
2. DEFINITIONS
For purposes of
interpreting the Plan and related documents the following
definitions shall apply:
2.1 “
Affiliate ” means, with respect to the Company, any
company or other trade or business that is controlled by the
Company within the meaning of Rule 405 of Regulation C under the
Securities Act, including, without limitation, any
Subsidiary.
2.2 “
Annual Incentive Award ” means a bonus payable subject
to attainment of performance goals over a Performance Period of up
to one year (the Company’s fiscal year, unless otherwise
specified by the Committee).
2.3 “
Board ” means the Board of Directors of the
Company.
2.4 “
Cause ” means, as determined by the Board and unless
otherwise provided in an applicable agreement with the Company: (i)
gross negligence or willful misconduct in connection with the
performance of duties; (ii) conviction of a criminal offense (other
than minor traffic offenses); or (iii) material breach of any term
of any employment, consulting or other services, confidentiality,
intellectual property or non-competition agreements, if any,
between the Participant and the Company or any Affiliate of the
Company.
2.5 “
Code ” means the Internal Revenue Code of 1986, as now
in effect or as hereafter amended.
2.6 “
Committee ” means the Compensation Committee of the
Board, which shall be comprised of not less than three directors of
Colfax, each of whom shall qualify in all respects as an
“outside director” for purpose of Code Section 162(m)
and Section 1.162-27(e)(3) of the Regulations.
2.7 “
Company ” means Colfax Corporation.
2.8 “
Participant ” means, with respect to a Performance
Period, each eligible office or key employee designated by the
Committee to receive an annual bonus payment contingent of
achievement of specified performance goals.
2.9 “
Performance Measure s” means measures as described in
Section 5.1.4 on which the performance goals are based and which
are approved by the Company’s shareholders pursuant to this
Plan in order to qualify Annual Incentive Awards as
performance-based compensation under Section 162(m).
2.10 “
Performance Period ” means the period of time during
which the performance goals must be met in order to determine the
degree of payout and/or vesting with respect to an Annual Incentive
Award.
2.11 “
Plan ” means this Colfax Corporation Annual Incentive
Plan.
2.12 “
Stock ” means the common stock, per value $0.001 per
share of the Company; provided, however, that to the extent an
annual bonus payment made pursuant to this Plan is paid in Stock,
the number of shares of Stock so delivered shall be drawn solely
from Stock available for awards under the Colfax Corporation 2008
Omnibus Incentive Plan.
2.13 “
Subsidiary ” means any subsidiary corporation of the
Company within the meaning of Section 424(f) of the
Code.
3. ADMINISTRATION
OF THE PLAN
3.1. Committee.
The Plan shall
be administered by the Committee. The Committee shall
have the authority to establish and administer the performance goal
and to certify the attainment of the performance goals as described
in Section 5.2 below. The Committee shall have the full
power and authority to construe, interpret and administer the Plan
and shall have the exclusive right to make awards under the Plan
and to exercise negative discretion pursuant to Section 5.1.3
below. The Committee may take action at a meeting or by
written consent in accordance with the Company’s
bylaws. The performance goals may be ratified by the
Board.
In
administering the Plan, the Committee may at its option employ
compensation consultants, accountants and counsel and other persons
to assist or render advice to the Committee, all at the expense of
the Company. Any determinations made by the Committee in
connection with the Plan shall be final and binding on the Company,
its Affiliates, Subsidiaries and their respective stockholders and
each Participant in the Plan.
3.2. Deferral
Arrangement.
The Board may
permit or require the deferral of any award payment into a deferred
compensation arrangement, subject to such rules and procedures as
it may establish, which may include provisions for the payment or
crediting of interest or earnings. Any such deferrals
shall be made in a manner that complies with Code Section
409A.
4. ELIGIBILITY
Eligibility
under this Plan is limited to eligible executives designated by the
Committee, in its discretion. Upon such designation for
a Performance Period, the executive shall become a
“Participant” under the Plan.
5. ANNUAL
INCENTIVE AWARDS
5.1. Granting
Annual Incentive Awards.
The Committee
may grant an Annual Incentive Award to each
Participant. In doing so, the Committee shall establish
the performance goals applicable to determination of each such
Participant’s Annual Incentive Award. The maximum
Annual Incentive Award payable to a Participant under this Plan for
a fiscal year shall be $3,000,000.
5.1.1. Performance
Goals Generally.
The performance
goals for Annual Incentive Awards shall consist of one or more
business criteria and a targeted level or levels of performance
with respect to each of such criteria, as specified by the
Committee consistent with this Section 5.1. Performance
goals shall be objective and shall otherwise meet the requirements
of Code Section 162(m) and regulations thereunder including the
requirement that the level or levels of performance targeted by the
Committee result in the achievement of performance goals being
“substantially uncertain.” The Committee may
determine that such Awards shall be granted and/or settled upon
achievement of any one performance goal or that two or more of the
performance goals must be achieved as a condition to grant and/or
settlement of such Annual Incentive Awards. Performance
goals may
