Con-way
Inc.
Executive Incentive Compensation Plan
Amended and
Restated December 2008
Executive
Incentive Compensation Plan
Amended and
Restated December 2008
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Purpose; EIP;
Administration; Claims
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1
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Definitions
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1
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Eligibility
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4
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Establishment
of Awards
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4
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Vesting
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7
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Amount of Award
Payout
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7
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Payment of
Award
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8
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Amendment;
Termination
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9
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1. Purpose;
EIP; Administration; Claims.
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(a)
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Purpose . This Con-way Inc. Executive
Incentive Compensation Plan (the “EICP”) is established
and maintained to motivate Executives effectively and efficiently.
For each calendar year through 2006, Con-way Inc. (f/k/a CNF Inc.)
(the “Company”) and its Affiliates adopted several
incentive compensation plans applicable to Executives for different
Business Units. For 2007 and future calendar years, the Company and
its Affiliates have instead adopted this EICP which applies to and
covers all Executives of the Company and its Business Units. The
EICP was originally effective January 1, 2007. The Plan was
subsequently amended in 2007 to make certain administrative
changes, and the Plan is hereby amended and restated in 2008 to
specifically incorporate the previous amendment and to make other
clarifying changes.
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(b)
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The EIP . Section 12 of the EIP
(defined below) authorizes the Committee to grant Awards pursuant
to the Annual Incentive Compensation Program in the form of Other
Cash-Based Awards, as deemed by the Committee to be consistent with
the purposes of the EIP. The EICP applies to Executives and, for
Executives, the EICP implements Section 12 of the EIP. The EICP is
subject to the applicable terms and provisions of the EIP, as
amended from time to time, including without limitation
(i) Section 3 (Administration), (ii) Section 4
(Eligibility), (iii) Section 12 (Annual Incentive
Compensation Program), (iv) Section 13 (Other Stock-Based
or Cash-Based Awards), (v) Section 15 (Claims Procedures), and
(vi) Section 16 (General Provisions), but excluding
Section 14 (Change in Control Provisions).
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(c)
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Administration
. The EICP is
administered by the Committee, pursuant to authority specified in
Section 3 of the EIP.
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(d)
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Claims . In the event that any person
believes that she or he is not receiving the full benefits to which
she or he is entitled under the EICP, such person may make a claim
to the Plan Administrator, and the claims procedures set forth in
Section 15 of the EIP shall apply, with the Plan Administrator
treated as the Committee for purposes of applying such
Section 15.
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For
Purposes of the EICP, the following terms shall be defined as set
forth below:
“
Affiliate ” is defined in Section 2 of the EIP
and includes a Subsidiary as defined in Section 2 of the
EIP.
“
Annual Compensation ” means a Participant’s
annual base salary. Annual Compensation does not include any other
form of compensation, including, for example, special bonus
payments or any other special compensation, payments
1
under short
and long term disability plans, in-service withdrawals of deferred
compensation, or any other compensation. To the extent that a
Participant elects to defer any portion of annual base salary,
Annual Compensation is computed without regard to such deferral.
For Participants who are designated as eligible to participate as
of January 1 of a calendar year, Annual Compensation is deemed to
be their annual base salary as of the first pay period following
February 1 of that year, unless a different date is selected by the
Committee. For Participants who first become eligible to commence
participation after the first pay period following February 1 of a
calendar year, Annual Compensation is deemed to be their annual
base salary as of the first pay period following the date the
Participant becomes eligible to participate in the EICP. For
Participants who receive promotional pay increases after the first
pay period following February 1 of a calendar year, Annual
Compensation is adjusted as of the first pay period following the
date the Participant receives a promotional pay increase, and the
Participant’s Award Payout shall be prorated to reflect her
or his Annual Compensation for the period prior to and subsequent
to such promotional pay increase.
“Award
” is
defined in Section 2 of the EIP.
“
Award Payout ” means the amount, if any, that is paid
to a Participant as determined pursuant to Section 6 of this
EICP.
“
Board ” is defined in Section 2 of the
EIP.
“
Business Unit ” is defined in Section 4(d) of the EICP
for purposes of the EICP. “Business Unit” is also
defined in Section 2 of the EIP, but that definition does not
apply to the EICP.
“
Committee ” is defined in Section 2 of the
EIP.
“
Company ” means Con-way Inc., a corporation organized
under the laws of the State of Delaware, or any successor
corporation.
“
EICP ” means this Con-way Inc. Executive Incentive
Compensation Plan, as amended and restated
December 2008.
“
EIP ” means the Con-way Inc. 2006 Equity and Incentive
Plan, as amended from time to time, or any successor
plan.
“
Employer ” means the Company or any Affiliate of the
Company that adopts the EICP, whichever is the employer of the
Participant.
“
Executive ” means an employee who occupies a position
that has been classified within the Company’s executive-level
salary grade structure.
“
ICP Pool ” means, for each Business Unit, the maximum
amount of Incentive Profit that can be paid out for attainment of
the Target Payment Goal.
2
“
Incentive Performance Goal ” means a goal set by the
Committee pursuant to Section 4.
“
Incentive Profit ” means operating income computed on
the basis of generally accepted accounting principles
(GAAP) in the United States, but without adjustment for (i)
loss or loss recovery, (ii) damage or damage recovery,
(iii) workers compensation, (iv) payouts under the EICP, the
EIP, or any other employee incentive plan (on a Business Unit by
Business Unit basis), (v) income tax, or (vi) except as
otherwise specified by the Committee with respect to a Business
Unit, interest income or expense. For clarity, Incentive Profit for
Business Units other than the Company and Con-way Enterprise
Services, Inc. is based on operating income prior to adjusting for
any Award Payouts to be paid pursuant to Section 6, and
Incentive Profit for the Company and for Con-way Enterprise
Services, Inc. is based on consolidated pre-tax income of the
Company, after adjusting for any Award Payouts to be paid pursuant
to Section 6 to Participants employed by any other Business
Units, but prior to adjusting for any amounts to be paid pursuant
to Section 6 to Participants who are employed by the Company
or by Con-way Enterprise Services, Inc., and prior to adjusting for
income tax. The Committee reserves the right to determine what
items are to be included in Incentive Profit, including but not
limited to whether significant unusual items are to be taken into
account in determining Incentive Profit.
“
Incentive Profit Goal ” means the level of Incentive
Profit that must be achieved for funding the ICP Pool, as
determined each year by the Plan Administrator.
“
Maximum Payment Goal ” means the amount or percentage
of an Incentive Performance Goal that must be achieved to produce
an Award Payout equal to 200% of the Target Payment
Goal.
“
Participant ” means an Executive designated by the
Committee or its delegate pursuant to Section 3 of the EICP.
Participants are also Grantees, as that term is defined in
Section 2 of the EIP.
“
Participation Factor ” means the percentage of Annual
Compensation assigned to a Participant for purposes of this EICP,
pursuant to Section 4.
“
Plan Administrator ” means the Committee or any person
or persons to whom the Committee delegates its authority or any
portion thereof.
“
Section 16 Officer ” means an officer who is
required to comply with Section 16 of the Securities Exchange
Act of 1934, as of the relevant date specified in this
EICP.
“
Target Payment Goal ” means the amount or percentage
of an Incentive Performance Goal that must be achieved to have an
Award Payout equal to a Participant’s Annual Compensation
times the Participant’s Participation Factor.
3
“
Threshold Payment Goal ” means the amount or
percentage of an Incentive Performance Goal that must be achieved
in order to have the first dollar of an Award Payout become
payable.
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(a)
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Designation . The Committee shall designate the
Executives eligible to participate for a calendar year with respect
to the Company and each Business Unit or Affiliate, pursuant to
Section 4 of the EIP, and may designate all Executives who are
otherwise eligible as of the beginning of the calendar year. The
Committee may delegate to the Company’s Chief Executive
Officer (the “CEO”) the authority to designate as
Participants Executive-level employees who first become Executives,
through hire or promotion, during a calendar year, as provided
herein. The Company shall maintain in its records a list of
Participants designated by the Committee, or by the CEO, for each
Business Unit for each calendar year.
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(b)
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Other Eligibility
Requirements. Unless otherwise determined by the
Plan Administrator, Participants must be active full-time
Executive-level employees. Such Executives who are not designated
as eligible as of the beginning of the calendar year shall become
eligible to commence participation at the beginning of the first
full calendar quarter following the date on which they become
Executives. Calendar quarters begin January 1, April 1,
July 1, and October 1. An Executive who commences
participation during a calendar year, who participates less than
four full quarters, and who is otherwise eligible to receive a
payment pursuant to Section 5 of this Plan, will receive a
pro-rata payment based on the number of full calendar quarters of
participation.
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4.
Establishment of Awards.
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(a)
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Incentive Performance
Goals . For
each calendar year, not later than ninety (90) days following the
commencement of that year, the Plan Administrator shall determine
which Incentive Performance Goals shall be used to fund the ICP
Pool for Award Payouts to all Participants, pursuant to
Section 7, and shall establish one or more Incentive
Performance
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