Exhibit 10.1

 

New Enterprise Stone & Lime Co., Inc. (“NESL”)

 

Incentive Compensation Guidelines (“IC”)

 

Date: August 26, 2014

 

A.            General Parameters

 

1.              The purpose of the IC is to provide opportunities for incentive
compensation awards to NESL management and selected key professional personnel
who, through high levels of performance, contribute to the success and
profitability of the company.  IC is designed to support organizational
financial goals and company growth and sustainability, by making available
additional, variable, and contingent compensation in the form of cash awards.

 

2.              IC is based upon the achievement of NESL financial targets and
other defined objectives, before any incentive compensation award is
considered.  The calculation of the share of the awards for potential
distribution to IC participants, and the target/award formulas, are constructed
to integrate the interests of the company and its shareholders with those of the
participants.  The potential awards are designed to enable NESL to attract,
retain, and motivate competent and effective management personnel, as well as
supporting the continued growth and profitability of the company.

 

3.              IC is intended to augment regular salary and benefits programs
already in existence.  It is not meant to be a substitute for salary increases
but supplemental to base salary and benefits and, as stated, a reward for
performance that contributes to outstanding levels of performance.

 

4.              The NESL Board of Directors will act on final disposition of all
matters pertaining to the approval of IC, supplements or revisions to the
guidelines and annual performance targets.  Authority will be delegated to the
Board’s Compensation Committee for the ongoing administration and interpretation
of the IC guidelines, as well as recommended targets, and payouts.

 

5.              In consultation with Chief Executive Officer, the Compensation
Committee will establish parameters, performance targets, and payout guidelines
for IC prior to the beginning of each fiscal year, consistent with the budgeting
and operating plan processes of the company, and recommend to the Board of
Directors for approval.

 

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6.              Although guidelines will be established for the formation and
administration of IC, the awarding of incentive compensation payments to
eligible participants is at the discretion of the Board of Directors.  With
regard to this discretion, the Board and the Compensation Committee may take
into account the presence or absence of nonrecurring or extraordinary items of
income, gain, expense, or loss and any and all factors which the Board and
Compensation Committee may deem relevant. These EBITDA adjustments may include,
but not be limited to, the use or production of working capital through changes
in accounts payable, accounts receivable, inventory and capital expenditures
relative to prior year and budgeted and actual sales. Extraordinary occurrences
will be considered factors in potential IC payouts to insure that the best
interests of the company and its shareholders are protected and not brought into
conflict with the interests of participants.

 

7.              IC payouts will be computed based upon company performance at
the end of the fiscal year and will be paid as set forth by the Board of
Directors or Compensation Committee.  Participants must be employed by the
company on the payout date in order to be eligible to receive an IC award.

 

B.            Eligible Positions

 

Exclusions include Chairman of the Board, Vice Chairman of the Board, Director
of Internal Audit, and three Senior Managers of Utilities Construction, who are
eligible for a separate bonus plan.

 

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C.            Performance Factors & Payout Weights Guidelines

 

1.              As outlined in IC guidelines and as approved by the Compensation
Committee, the potential pool is created when company EBITDA targets are
achieved.

 

2.              In addition to company EBITDA , annual performance targets will
also be established as follows:

 

·                  Business Operations Divisions — Division EBITDA vs. approved
budget

 

·                  Shared Services and Business Support & Margin Growth
Divisions/Departments — Division/Department performance vs. approved strategic
objectives

 

·                  Individual Participants — Participant performance vs.
approved individual strategic performance objectives for Executive Management
and selected Sr. Management positions and results of annual Performance
Appraisals for all other participants

 

3.              Recommendations for individual awards for eligible participants
will be made by corporate executive management, consistent with the guidelines
established for the current fiscal year IC, and submitted to the Compensation
Committee for consideration.  Following their review, the Compensation Committee
will recommend IC payouts to the Board of Directors for final approval.

 

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