Exhibit 10.2

 

HUGHES SUPPLY, INC.

2005 Annual Incentive Plan

 

1. Purpose. The purpose of the Hughes Supply, Inc. 2005 Annual Incentive Plan is
to motivate and reward short-term performance by providing cash bonus payments
based upon the achievement of pre-established and objective performance goals
for each fiscal year and other discretionary cash bonus payments.

 

2. Definitions. The following definitions are applicable to the Plan:

 

(a) “Annual Incentive Award” means a target annual incentive award made pursuant
to Section 5 of the Plan.

 

(b) “Award” means an Annual Incentive Award or a Discretionary Award.

 

(c) “Base Salary” means the base rate of cash compensation paid by the Company
to or for the benefit of a Participant for services rendered or labor performed
while a Participant in this Plan, including base pay a Participant could have
received in cash in lieu of deferrals under the Hughes Supply, Inc.
Non-Qualified Deferred Compensation Plan or to any cafeteria plan under Section
125 of the Code maintained by the Company.

 

(d) “Board” means the Board of Directors of the Corporation.

 

(e) “Code” means the Internal Revenue Code of 1986, as amended, including
Treasury Regulations.

 

(f) “Committee” means the Compensation Committee of the Board, which shall be
appointed by, and serve at the pleasure of, the Board, and shall consist of
members of the Board who are not employees of the Corporation or any affiliate
thereof and who qualify as “outside directors” under Section 162(m) of the
Internal Revenue Code, as amended from time to time, and the regulations
promulgated thereunder.

 

(g) “Discretionary Award” means an award made pursuant to Section 6 of the Plan.

 

(h) “Executive Officer” means an employee of the Company whom the Board has
designated as an executive officer of the Corporation for purposes of reporting
under the Securities Exchange Act of 1934, as amended from time to time, or any
successor thereto.

 

(i) “Fiscal Year” means the fiscal year of the Company.

 

(j) “Participant” means any Executive Officers designated by the Committee to
participate in the Plan.

 

(k) “Plan” means this Hughes Supply, Inc. Annual Incentive Plan, as it may be
amended from time to time.

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3. Administration of Plan. The Plan shall be administered by the Committee. The
Committee shall have the authority to select Executive Officers to participate
in the Plan, to determine performance goals and the Annual Incentive Award
amounts to be paid upon achievement of the performance goals, to determine other
terms and conditions of Awards under the Plan, to establish and amend rules and
regulations relating to the Plan, and to make all other determinations necessary
and advisable for the administration of the Plan. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem desirable to carry it into
effect. All decisions made by the Committee pursuant to the Plan shall be made
in the Committee’s sole and absolute discretion and shall be final and binding
on Executive Officers, Participants, and the Company.

 

4. Designation of Participants. Participants in the Plan shall be selected by
the Committee on an annual basis from among the Executive Officers.

 

5. Annual Incentive Awards.

 

(a) Each Participant shall be eligible to receive such Annual Incentive Award,
if any, for each Fiscal Year as may be payable pursuant to the performance
criteria described below. The Committee shall, on an annual basis, establish an
Annual Incentive Award for each Participant. Annual Incentive Awards consist of
cash amounts payable upon the achievement during a Fiscal Year of specified
objective performance goals. Within the first 90 days of the Fiscal Year, the
Committee will establish the performance goal(s) and the amount to be paid if
the performance goal(s) are achieved. The Annual Incentive Award, if any, for
each Participant will be determined as a percentage of the Participant’s Base
Salary, or as the sum of a percentage of the funds available for the payment of
such Annual Incentive Award and a percentage of the Participant’s Base Salary up
to a designated maximum percentage of the Participant’s Base Salary. The maximum
Annual Incentive Award that may be awarded to a Participant for a Fiscal Year
shall be 300% of the Participant’s Base Salary for such Fiscal Year.

 

(b) Participants shall have their Annual Incentive Awards, if any, determined on
the basis of the degree of achievement of performance goals which shall be
established by the Committee in writing and which goals shall be stated in terms
of the attainment of specified levels of or percentage changes (as compared to a
prior measurement period) in any one or more of the following measurements:
return on sales; return on investment; department performance; stock price;
average annual growth in earnings per share; increase in shareholder value;
earnings per share; net income; return on assets; return on shareholders’
equity; increase in cash flow; operating profit or operating margins; revenue
growth of the Company; and operating expenses. The Committee shall, for each
Fiscal Year, establish the performance goal or goals from among the foregoing to
apply to each Participant and a formula or matrix prescribing the extent to
which such Participant’s annual incentive award shall be earned based upon the
achievement of such performance goal or goals.

 

(c) Each Annual Incentive Award shall be based solely on achievement of one or
more of the applicable performance goals as established by the Committee
pursuant to Section 5(a) above and the Committee shall not have the discretion
to increase the amount of the Annual Incentive Award. No Annual Incentive Award
shall be payable except upon written certification by the Committee that the
performance goals have been satisfied to a particular extent and that any other
material terms and conditions precedent to payment of an Annual Incentive Award
have been satisfied.

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(d) Payment of any Annual Incentive Award amount to be paid to a Participant
based upon the degree of attainment of the applicable performance goals shall be
made at such time(s) as the Committee may in its discretion determine.

 

6. Discretionary Awards. The Committee may grant a cash award to any Participant
in such amount and upon such terms and conditions as shall be determined by the
Committee in its discretion.

 

7. Participant’s Interests. A Participant’s interest in any Awards shall at all
times be reflected on the Company’s books as a general unsecured and unfunded
obligation of the Company subject to the terms and conditions of the Plan. The
Plan shall not give any person any right or security interest in any asset of
the Company or any fund in which any deferred payment is deemed invested.
Neither the Company, the Board, nor the Committee shall be responsible for the
adequacy of the general assets of the Company to discharge, or required to
reserve or set aside funds for, the payment of its obligations hereunder.

 

8. Non-Alienation of Benefits; Beneficiary Designation. All rights and benefits
under the Plan are personal to the Participant and neither the Plan nor any
right or interest of a Participant or any other person arising under the Plan is
subject to voluntary or involuntary alienation, sale, transfer, or assignment.
Subject to the foregoing, the Company shall establish such procedures as it
deems necessary for a Participant to designate one or more beneficiaries to whom
any payment the Committee determines to make would be payable in the event of
the Participant’s death.

 

9. Withholding for Taxes. Notwithstanding any other provisions of this Plan, the
Company may withhold from any payment made by it under the Plan such amount or
amounts as may be required for purposes of complying with any federal, state and
local tax or withholding requirements.

 

10. Rights of Employees. Nothing in the Plan shall interfere with or limit in
any way the right of the Company to terminate a Participant’s employment at any
time, or confer upon any Participant any right to continued employment with the
Company or any of its subsidiaries or affiliates.

 

11. Determinations Final. Each determination provided for in the Plan shall be
made by the Committee under such procedures as may from time to time be
prescribed by the Committee and shall be made in the sole discretion of the
Committee. Any such determination shall be conclusive.

 

12. Adjustment of Awards. The Committee shall be authorized to make adjustments
in the method of calculating attainment of performance goals in recognition of
unusual or nonrecurring events affecting the Corporation or its financial
statements or changes in applicable laws, regulations or accounting principles;
provided, however, that no such adjustment shall impair the rights of any
Participant without his consent and that any such adjustments with respect to
Annual Incentive Awards shall be made in a manner consistent with Section 162(m)
of the Code.

 

13. Amendment or Termination. The Board may, in its sole discretion, amend,
suspend or terminate the Plan from time to time. No such termination or
amendment shall alter a Participant’s right to receive a distribution as
previously earned, as to which this Plan shall remain in effect following its
termination until all such amounts have been paid, except as the Company may
otherwise determine.