Incentive Plan

Marten Transport, Ltd. Executive Officer Performance Incentive Plan

Exhibit 10.1
 
 
EXECUTIVE OFFICER PERFORMANCE INCENTIVE PLAN
 
I.
GENERAL
 
 
A.
Plan Purpose.  In an effort to maintain a position of leadership in the highly competitive business segments in which Marten Transport, Ltd. (the “Company”) competes, it is necessary to promote the financial interests of the Company and its Subsidiaries, including its growth, by attracting and retaining highly qualified executive officers possessing outstanding ability, motivating such executives by means of performance related incentives, and providing incentive compensation opportunities which are competitive with those of similar corporations.  The Marten Transport, Ltd. Executive Officer Performance Incentive Plan (the “Plan”) is designed to assist the Company in attaining these objectives.
 
 
B.
Cash Bonus Plan.  The Plan is a cash bonus plan and is not intended to be (and shall not be construed and administered as) a deferred compensation plan or an employee benefit plan within the meaning of ERISA.  Bonus Awards under this Plan are intended to be discretionary and shall not constitute a part of an employee’s regular rate of pay for any purpose.
 
 
C.
Term.  The provisions of the Plan shall continue indefinitely subject to termination by the Company; however, the Committee shall, in its sole and absolute discretion, determine each year whether Bonus Awards will be granted for such year and the amount of any Bonus Award for a Participant.
 
 
D.
Definitions.  Unless the context requires otherwise, the following terms when used with initial capitalization have the following meanings:
 
Award Year - The calendar year for which Bonus Awards, if any, are calculated under the Plan.
 
Award Year Diluted Net Income per Share - The Company’s diluted net income per share, determined in accordance with generally accepted accounting principles, prior to accounting for the aggregate value of vesting Performance Unit Awards, the aggregate value of the Bonus Awards and the related tax effects for the Award Year.
 
Base Salary - The annual base compensation paid to an Eligible Employee for an Award Year and base pay not paid during the Award Year as a result of an earnings reduction election under a Code section 125 cafeteria plan or any deferred compensation plan or other arrangement.
 
Board - The Board of Directors of the Company.
 
Bonus Award - The cash bonus payable from the Bonus Pool to a Participant as determined under Section III.A., subject to the terms of the Plan.
 
 
 

 
 
Bonus Pool – For each Award Year, an amount equal to (a) the percentage increase in the Award Year Diluted Net Income per Share over the Prior Year Diluted Net Income per Share (subject to the increase being at least 10%), multiplied by (b) the aggregate Base Salary for all Eligible Employees.
 
Code - The Internal Revenue Code of 1986, as from time to time amended including any related regulations.
 
Committee - The Compensation Committee of the Board.
 
 
Designated Subsidiary - A subsidiary of the Company that has been designated by the Committee from time to time, in its sole and absolute discretion, as eligible to participate in the Plan.
 
Eligible Employee - Each Executive Officer of the Company or a Designated Subsidiary who has completed at least one year of continuous service as of December 31 of an Award Year and is employed by the Company or a Designated Subsidiary as of December 31 of an Award Year.
 
Employer - The Company and any Designated Subsidiary.
 
ERISA - The Employee Retirement Income Security Act of 1974, as from time to time amended, including any related regulations.
 
Executive Officer - Each executive officer of the Company who has been elected an executive officer, within the meaning of the rules of the Securities and Exchange Commission, by the Board.
 
Participant - Each Eligible Employee who is designated as a Participant for an Award Year by the Committee.
 
Performance Unit Awards - The Company’s outstanding performance unit awards granted from time to time by the Board.
 
Plan - The Marten Transport, Ltd. Executive Officer Performance Incentive Plan, as evidenced by this written instrument as may be amended from time to time.
 
Prior Year Diluted Net Income per Share - The Company’s diluted net income per share, as reported in its audited financial statements, for the Prior Year.
 
Subsidiary - Any entity, corporate or otherwise, in which the Company, directly or indirectly, owns or controls a greater than 50% interest.
 
 
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II.
PARTICIPATION
 
 
A.
Participants.  Participants will be determined annually by the Committee from among the Company’s Eligible Employees.  Designation as a Participant will apply only for the Award Year for which the designation is made and may include a partial year.
 
 
B.
Termination of Employment.  In order to be entitled to receive a payment for Bonus Award for an Award Year, a Participant must be actively and continuously employed for at least one year through December 31 of the Award Year for which the Bonus Award is paid; however, the Committee may, in its sole and absolute discretion, pay a Bonus Award to a Participant who has terminated employment prior to December 31 of the relevant Award Year.
 
III.
COMPUTATION AND PAYMENT OF BONUS AWARDS
 
 
A.
Bonus Pool.  The Bonus Pool will be established only if the percentage increase in the Award Year Diluted Net Income per Share over the Prior Year Diluted Net Income per Share is at least 10%.  Subject to the foregoing, the Committee, in its sole and absolute discretion, shall determine the amount of the Bonus Award, if any, payable from the Bonus Pool to each Participant, and the Committee shall not be required to allocate the full Bonus Pool among the Participants.
 
 
B.
Committee’s Discretion.  The Committee may, in its sole and absolute discretion, adjust Award Year Diluted Net Income per Share and Prior Year Diluted Net Income per Share at any time during or after an Award Year to account for extraordinary items affecting diluted net income per share.
 
 
C.
Cash Payment.  Payment of a Bonus Award will be made in cash as soon as practicable following the end of the Award Year, without interest, but in any event by the March 15 following the end of the Award Year.
 
 
D.
Withholding Taxes.  Notwithstanding any of the foregoing provisions, the Employer shall withhold from any payment to be made hereunder such amounts as it reasonably determines it may be required to withhold under any applicable federal, state or other law, and transmit such withheld amounts to the appropriate authorities.
 
 
E.
Payment in Event of Incapacity.  If any individual entitled to receive any payment under the Plan is, in the judgment of the Committee, physically, mentally or legally incapable of receiving or acknowledging receipt of the payment, and no legal representative has been appointed for the individual, the Committee may (but is not required to) cause the payment to be made to any one or more of the following as may be chosen by the Committee; the institution maintaining the individual; a custodian for the individual under the Uniform Transfers to Minors Act of any state; or the individual’s spouse, child, parent, or other relative by blood or marriage.  The Committee is not required to see to the proper application of any such payment, and the payment completely discharges all claims under the Plan against the Company, and the Plan to the extent of the payment.
 
 
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F.
Payment in the Event of Death.  Distribution to a deceased Participant will be made to the Participant’s heirs determined pursuant to the applicable laws of inheritance or descent.
 
IV.
PLAN ADMINISTRATION
 
 
A.
Plan Administration.  The Committee or its delegate has the authority and responsibility to manage and control the general administration of the Plan.  This Plan is not intended to modify or limit the powers, duties or responsibilities of the Committee as set forth under the Charter for the Committee as adopted by the Board from time to time.  Determinations, decisions and actions of the Committee, in connection with the construction, interpretation, administration, or application of the Plan will be final, conclusive, and binding upon any Participant and any person claiming under or through the Participant.  No employee of an Employer, any member of the Board, any delegate of the Board, or any member of the Committee will be liable for any determination, decision, or action made in good faith with respect to the Plan or any Bonus Award made under the Plan.
 
 
B.
Compensation Committee.  The Compensation Committee has the sole authority and responsibility to establish the amount of any Bonus Award payable to any Participant.
 
V.
AMENDMENT OR TERMINATION
 
The Plan may at any time be amended, modified, or terminated, as the Committee in its sole and absolute discretion determines. Such amendment, modification, or termination of the Plan will not require the consent, ratification, or approval of any party, including any Participant.
 
VI.
MISCELLANEOUS
 
 
A.
Non-Assignability.  A Participant’s rights and interests in and to p