Exhibit 10.2
TRINITY INDUSTRIES, INC.
ANNUAL INCENTIVE PLAN
Article I
Purpose
The purpose of the Trinity Industries, Inc. Annual Incentive Plan (the “Plan”)
is to advance the interests of Trinity Industries, Inc. (the “Company”) and its
stockholders by (a) providing certain employees of the Company and its
Subsidiaries (as hereinafter defined) with incentive compensation which is tied
to the achievement of pre-established and objective performance goals,
(b) identifying and rewarding superior performance and providing competitive
compensation to attract, motivate, and retain employees who have outstanding
skills and abilities and who achieve superior performance, and (c) fostering
accountability and teamwork throughout the Company.
The Plan is intended to provide Participants (as hereinafter defined) with
incentive compensation which is not subject to the deduction limitation rules
prescribed under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), and should be construed to the extent possible as providing for
remuneration which is “performance-based compensation” within the meaning of
Code Section 162(m) and the treasury regulations promulgated thereunder.
Article II
Definitions
For the purposes of this Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:
“Award” means a grant of Incentive Compensation that may be paid to an Eligible
Employee upon the satisfaction of specified Performance Goal(s) for a particular
Performance Period; such Performance Period may be for a period of less than a
Fiscal Year (e.g., six months, a “Short-Term Award”), a period equal to a Fiscal
Year (an “Annual Award”), or a period in excess of a Fiscal Year (e.g., three
Fiscal Years, a “Long-Term Award”).
“Base Pay” means for a Performance Period with a duration equal to or less than
a Fiscal Year, a Participant's aggregate base salary received from the Company
during the Performance Period, or, for a Performance Period with a duration
longer than a Fiscal Year, a Participant's annualized rate of base salary
received from the Company during the Performance Period, each according to the
books and records of the Company, excluding overtime, commissions, bonuses,
disability pay, any Incentive Compensation paid to the Participant, or any other
payment in the nature of a bonus or compensation paid under any other employee
plan, contract, agreement, or program.
“Board” means the Board of Directors of the Company.
“Business Unit” means any segment or operating or administrative unit, including
geographical unit, of the Company identified by the Committee as a separate
business unit, or a Subsidiary identified by the Committee as a separate
business unit.
“Business Unit Performance Goals” means the objective performance goals
established for each Business Unit in accordance with Sections 5.1 and 5.2 below
for any Performance Period.
“Change in Control” means an event set forth in any one of the following
paragraphs shall have occurred:
(i) any Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its Affiliates)
representing 30% or more of the combined voting power of the Company's then
outstanding securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (A) of paragraph
(iii) below; or
(ii) the following individuals cease for any reason to constitute a majority of
the number of directors then serving: individuals who, on the date of approval
of this Plan by the stockholders, constitute the Board and any new director
(other than a director whose initial assumption of office is in connection with
an actual or threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors on the
date of approval of this Plan by the stockholders or whose appointment, election
or nomination for election was previously so approved or recommended; or
(iii) there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other corporation, other
than (A) a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power of the securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such merger
or consolidation or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of

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securities of the Company (not including in the securities Beneficially Owned by
such Person any securities acquired directly from the Company or its Affiliates
other than in connection with the acquisition by the Company or its Affiliates
of a business) representing 30% or more of the combined voting power of the
Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or substantially all of
the Company's assets to an entity, at least 60% of the combined voting power of
the voting securities of which are owned by stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale.
For purposes hereof:
“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under
Section 12 of the Exchange Act.
“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from
time to time.
“Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (1) the Company or any of its subsidiaries, (2) a trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any of its Affiliates, (3) an underwriter temporarily holding securities
pursuant to an offering of such securities or (4) a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
Notwithstanding the foregoing provisions of this “Change in Control” definition,
to the extent necessary to comply with Section 409A of the Code, an event shall
not constitute a “Change in Control” for purposes of the Plan, unless such event
also constitutes a “change in control” as defined in Section 409A of the Code,
and the treasury regulations or other guidance issued thereunder.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Human Resources Committee of the Board or any other
committee as determined by the Board, which shall consist of two or more
“outside directors” within the meaning of Code Section 162(m).
“Company” means Trinity Industries, Inc., a Delaware corporation.
“Company Performance Goals” means the objective performance goals established
for the Company in accordance with Sections 5.1 and 5.3 below for any
Performance Period.
“Covered Employee” shall have the same meaning as the term “covered employee”
(or its counterpart, as such term may be changed from time to time) contained in
the treasury regulations promulgated under Code Section 162(m), or their
respective successor provision or provisions, that being an employee for whom
the limitation on deductibility for compensation pursuant to Code Section 162(m)
is applicable.
“Disability” means a Participant is qualified for long-term disability benefits
under the Company's or Subsidiary's disability plan or insurance policy; or, if
no such plan or policy is then in existence or if the Participant is not
eligible to participate in such plan or policy, that the Participant, because of
a physical or mental condition resulting from bodily injury, disease, or mental
disorder, is unable to perform his or her duties of employment for a period of
six (6) continuous months, as determined in good faith by the Committee, based
upon medical reports or other evidence satisfactory to the Committee.
Notwithstanding the foregoing sentence, in the event an Award issued under the
Plan is subject to Code Section 409A, then, in lieu of the foregoing definition
and to the extent necessary to comply with the requirements of Code
Section 409A, the definition of “Disability” for purposes of such Award shall be
the definition of “disability” provided for under Code Section 409A and the
regulations or other guidance issued thereunder.
“Eligible Employee” shall mean any Employee of the Company or any Subsidiary.
“Employee” means a common law employee (as defined in accordance with the
treasury regulations and revenue rulings applicable under Code Section 3401(c))
of the Company or any Subsidiary of the Company.
“Fiscal Year” means the fiscal year of the Company, which is the twelve-month
(12-month) period ending on December 31 of each calendar year.
“Incentive Compensation” means the compensation approved by the Committee to be
paid to a Participant for any Performance Period under the Plan.
“Individual Performance Goals” means the objective performance goals established
for an individual Participant in accordance with Section 5.6 below for any
Performance Period.

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“Maximum Achievement” means, for a Participant for any Performance Period, the
maximum level of achievement of a set of Performance Goals required for
Incentive Compensation to be paid, which shall be established by the Committee
in accordance with Section 5.1 below.
“Participant” means an Employee of the Company or a Subsidiary who satisfies the
eligibility requirements of Article IV of the Plan and who is selected by the
Committee (or an Authorized Officer, duly appointed in accordance with Article
III) to participate in the Plan for any Performance Period.
“Performance Criteria” shall have the meaning set forth in Section 5.2 below.
“Performance Goals” means the Individual Performance Goals, Business Unit
Performance Goals, and Company Performance Goals established by the Committee
for a Participant, the Company and/or each Business Unit for any Performance
Period, as provided in Sections 5.1, 5.2, 5.3, and 5.6 below.
“Performance Period” means the period selected by the Committee for the payment
of Incentive Compensation, which period shall be scheduled in good faith at the
time the Performance Goals for such period are established. Unless the
Committee, in its discretion, specifies other Performance Periods for the
payment of Incentive Compensation hereunder, the Performance Period shall be a
Fiscal Year.
“Plan” means the Trinity Industries, Inc. Annual Incentive Plan, as it may be
amended from time to time.
“Subsidiary” means (i) any corporation in an unbroken chain of corporations
beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing a majority of the total
combined voting power of all classes of stock in one of the other corporations
in the chain, (ii) any limited partnership, if the Company or any corporation
described in item (i) above owns a majority of the general partnership interest
and a majority of the limited partnership interests entitled to vote on the
removal and replacement of the general partner, and (iii) any partnership or
limited liability company, if the partners or members thereof are composed only
of the Company, any corporation listed in item (i) above, any limited
partnership listed in item (ii) above or any other limited liability company
described in this item (iii). “Subsidiaries” means more than one of any such
corporations, limited partnerships, partnerships, or limited liability company.
“Target Achievement” means, for a Participant for any Performance Period, the
level of achievement of a set of Performance Goals required for Incentive
Compensation to be paid, which shall be established by the Committee in
accordance with Section 5.1 below.
“Threshold Achievement” means, for a Participant for any Performance Period, the
minimum level of achievement of a set of Performance Goals required for any
Incentive Compensation to be paid, which shall be established by the Committee
in accordance with Section 5.1 below.
Article III
Administration
3.1 Committee's Authority. Subject to the terms of this Article III, the Plan
shall be administered by the Committee. For each Performance Period, the
Committee shall have full authority to (i) designate the Eligible Employees who
shall participate in the Plan; (ii) establish the Performance Goals and
achievement levels for each Participant pursuant to Article V hereof; and
(iii) establish and certify the achievement of the Performance Goals.
Notwithstanding any provision of the Plan to the contrary, any decision
concerning the awarding of Incentive Compensation hereunder (including, without
limitation, establishment of Performance Goals, Threshold Achievement, Target
Achievement, Maximum Achievement, and any other information necessary to
calculate Incentive Compensation for a Covered Employee for such Performance
Period) shall be made exclusively by the members of the Committee who are at
that time “outside” directors, as that term is used in Code Section 162(m) and
the treasury regulations promulgated thereunder.
3.2 Committee Action. A majority of the Committee shall constitute a quorum, and
the act of a majority of the members of the Committee present at a meeting at
which a quorum is present shall be the act of the Committee.
3.3 Committee's Powers. The Committee shall have the power, in its discretion,
to take such actions as may be necessary to carry out the provisions and
purposes of the Plan and shall have the authority to control and manage the
operation and administration of the Plan. In order to effectuate the purposes of
the Plan, the Committee shall have the discretionary power and authority to
construe and interpret the Plan, to supply any omissions therein, to reconcile
and correct any errors or inconsistencies, to decide any questions in the
administration and application of the Plan, and to make equitable adjustments
for any mistakes or errors made in the administration of the Plan. All such
actions or determinations made by the Committee, and the application of rules
and regulations to a particular case or issue by the Committee, in good faith,
shall not be subject to review by anyone, but shall be final, binding and
conclusive on all persons ever interested hereunder.
To the extent permitted by applicable law, the Committee also may, in its
discretion and by a resolution adopted by the Committee, authorize one or more
officers of the Company (each an “Authorized Officer”), solely with respect to
Employees who are not Covered Employees, within the ten most highest compensated
officers of the Company, or Authorized Officers:

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(i) determine the amount of Incentive Compensation payable to such Employees in
accordance with the terms of the Plan; (ii) establish Performance Goals for such
Employees, and certify whether, and to what extent, such Performance Goals were
achieved for the applicable Performance Period; and (iii) reduce Incentive
Compensation payable to such Employees in accordance with the provisions of
Section 5.6, and authorize payment to such Employees in accordance with Article
VI.
In construing the Plan and in exercising its power under provisions requiring
the Committee's approval, the Committee shall attempt to ascertain the purpose
of the provisions in question, and when the purpose is known or reasonably
ascertainable, the purpose shall be given effect to the extent feasible.
Likewise, the Committee is authorized to determine all questions with respect to
the individual rights of all Participants under this Plan, including, but not
limited to, all issues with respect to eligibility. The Committee shall have all
powers necessary or appropriate to accomplish its duties under this Plan
including, but not limited to, the power to:
(a) designate the Eligible Employees who shall participate in the Plan;
(b) maintain complete and accurate records of all Plan transactions and other
data in the manner necessary for proper administration of the Plan;
(c) adopt rules of procedure and regulations necessary for the proper and
efficient administration of the Plan, provided the rules and regulations are not
inconsistent with the terms of the Plan as set out herein. All rules and
decisions of the Committee shall be uniformly and consistently applied to all
Participants in similar circumstances;
(d) enforce the terms of the Plan and the rules and regulations it adopts;
(e) review claims and render decisions on claims for benefits under the Plan;
(f) furnish the Company or the Participants, upon request, with information that
the Company or the Participants may require for tax or other purposes;
(g) employ agents, attorneys, accountants or other persons (who also may be
employed by or represent the Company) for such purposes as the Committee
considers necessary or desirable in connection with its duties hereunder; and
(h) perform any and all other acts necessary or appropriate for the proper
management and administration of the Plan.
Article IV
Eligibility
For each Performance Period, the Committee shall select the particular Eligible
Employees to whom Incentive Compensation may be awarded for such Performance
Period; with respect to Covered Employees, such determination shall be made
within the first ninety (90) days of such Performance Period (and in the case of
a Performance Period less than a Fiscal Year, such determination shall be made
no later than the date that 25% of the Performance Period has elapsed). To the
extent permitted by the Committee, Employees who participate in the Plan may
also participate in other incentive or benefit plans of the Company or any
Subsidiary. Notwithstanding any provision in this Plan to the contrary, the
Committee may grant one or more Awards to an Eligible Employee at any time, and
from time to time, and the Committee shall have the discretion to determine
whether any such Award shall be a Short-Term Award, an Annual Award or a
Long-Term Award.
Article V
Determination of Goals and Incentive Compensation
5.1 Establishment of Business Unit and Company Performance Goals. No later than
the ninetieth (90th) day of the Performance Period (and in the case of a
Performance Period less than a Fiscal Year, such determination shall be made no
later than the date that 25% of the Performance Period has elapsed), the
Committee shall approve and deliver to the Board a written report setting forth:
(i) the Business Unit Performance Goals for the Performance Period, (ii) the
Company Performance Goals for the Performance Period, (iii) the Threshold
Achievement, Target Achievement, and Maximum Achievement levels for the Business
Unit Performance Goals and Company Performance Goals for the Performance Period,
(iv) with respect to each Participant, Incentive Compensation for achievement of
Threshold Achievement, Target Achievement, and Maximum Achievement levels and
the relative weighting of each Performance Goal in determining the Participant's
Incentive Compensation, and (v) a schedule setting forth the payout opportunity
for Threshold Achievement, Target Achievement, and Maximum Achievement levels.
5.2 Categories of Business Unit Performance Goals. The Business Unit Performance
Goals, if any, established by the Committee for any Performance Period may
differ among Participants and Business Units. For each Business Unit, any
Business Unit Performance Goals shall be based on the performance of the
Business Unit. Performance criteria for a Business Unit shall be related to the
achievement of financial and operating objectives of the Business Unit, which,
where applicable, shall be within the meaning of Code Section 162(m), and
consist of one or more of any of the following criteria: cash flow; cost;
revenues; sales; ratio of debt to debt plus equity; net borrowing, credit
quality or debt ratings; profit before tax; economic profit; earnings before
interest and taxes; earnings before interest, taxes, depreciation and
amortization; gross margin; earnings per share (whether on a pre-tax, after-tax,
operational or other basis); operating earnings; capital expenditures; expenses
or expense levels; economic value

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added; ratio of operating earnings to capital spending or any other operating
ratios; free cash flow; net profit; net sales; net asset value per share; the
accomplishment of mergers, acquisitions, dispositions, public offerings or
similar extraordinary business transactions; sales growth; price of the
Company's common stock; return on net assets, equity or stockholders' equity;
market share; inventory levels, inventory turn or shrinkage; or total return to
stockholders (“Performance Criteria”). Any Performance Criteria may be measured
in absolute terms, relative to a peer group or index, relative to past
performance, or as otherwise determined by the Committee. Any Performance
Criteria may include or exclude (i) extraordinary, unusual and/or non-recurring
items of gain or loss, (ii) gains or losses on the disposition of a business,
(iii) changes in tax or accounting regulations or laws, or (iv) the effect of a
merger or acquisition, as identified in the Company's quarterly and annual
earnings releases. In all other respects, Performance Criteria shall be
calculated in accordance with the Company's financial statements, under
generally accepted accounting principles, or under a methodology established by
the Committee which is consistently applied and identified in the audited
financial statements, including footnotes, or the Management Discussion and
Analysis section of the Company's annual report.
5.3 Company Performance Goals. The Company Performance Goals, if any,
established by the Committee for any Performance Period shall relate to the
achievement of predetermined financial and operating objectives for the Company
and its Subsidiaries on a consolidated basis, which, where applicable, shall be
within the meaning of Code Section 162(m) and consist of one or more of any
combination of the factors sets forth in Section 5.2 above, as applied to the
Company and its Subsidiaries on a consolidated basis. The Company Performance
Goals may be established either on an absolute or on a per share basis
reflecting dilution of shares as the Committee deems appropriate and, if the
Committee so determines, net of or including cash dividends. The Company
Performance Goals may also be established on a relative basis as compared to the
performance of a published or special index deemed applicable by the Committee
including, but not limited to, a group of companies deemed by the Committee to
be comparable to the Company.
5.4 Certification. On or before March 31 of the year immediately following the
end of the applicable Performance Period and following receipt of the
independent auditor's report, the Committee shall certify in writing and in
compliance with the requirements of Treasury Regulation 1.162-27 (and successor
regulations thereto) in the case of any Award intended to qualify under Code
Section 162(m): (i) the extent to which each Business Unit achieved its Business
Unit Performance Goals, if any, for the Performance Period, (ii) the extent to
which the Company achieved its Company Performance Goals, if any, for the
Performance Period, (iii) the calculation of the Participants' Incentive
Compensation, and (iv) the determination by the Committee of the amount of
Incentive Compensation, if any, to be paid to each Participant for the
Performance Period. In determining whether Performance Goals have been achieved
and Incentive Compensation is payable for a given Performance Period, generally
accepted accounting principles to the extent applicable to the Performance Goal
shall be applied on a basis consistent with prior periods, and such
determinations shall be based on the calculations made by the Company and
binding on each Participant. Approved minutes of the Committee meeting in which
the certification required by this Section 5.4 is made shall be treated as
written certification for purposes for this Section 5.4.
5.5 Earned Award Based on Level of Achievement. If Threshold Achievement is
attained with respect to a Performance Goal, then the Incentive Compensation
that may be paid to such Participant with respect to such Performance Goal shall
be based on the Committee's predetermined schedule (which may allow for
interpolation between achievement levels) setting forth the earned award.
5.6 Discretion to Reduce Incentive Compensation. After the certification
described in Section 5.4 the Committee may, in its sole and absolute discretion,
decrease the Incentive Compensation to be paid to one or more Participants for
such Performance Period. The Committee may consider subjective factors,
including factors communicated to the Participant at the beginning of the
Performance Period or other factors the Committee considers appropriate, and
including any Individual Performance Goals set for the Participant for the given
Performance Period, in determining whether to reduce the Incentive Compensation
to be paid to a Participant. Individual Performance Goals need not have been
established during the specific time periods set forth in Section 5.1 above for
the establishment of Company Performance Goals and Business Unit Performance
Goals.
5.7 Limitation on Total Incentive Compensation. Notwithstanding any provision to
the contrary contained herein, the maximum Incentive Compensation payable to any
Participant with respect to any single Award shall not exceed $3,000,000.
Article VI
Payment of Incentive Compensation
6.1 Form and Time of Payment. Subject to the provisions of Sections 6.2 and 6.3
below and except as otherwise provided herein, a Participant's Incentive
Compensation for a Performance Period shall be paid in the year immediately
following the close of the year in which such Performance Period ends, following
receipt of the independent auditor's report, but no later than March 31 of such
year. The payment shall be in the form directed by the Committee and may either
be paid in a cash lump sum payment or in installments.
6.2 Forfeiture Upon Termination Prior to Date of Payment. If a Participant's
employment with the Company and all of its Subsidiaries is terminated
voluntarily by the Participant for any reason, or is terminated by his or her
employer for any reason

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other than the death or Disability of the Participant, during a Performance
Period or after a Performance Period but prior to the date of actual payment in
accordance with Section 6.1 above, then such Participant will immediately
forfeit any right to receive any Incentive Compensation hereunder for such
Performance Period. However, under such circumstances where the termination of
employment occurs after the Performance Period has ended but prior to the date
of actual payment, the Committee may pay the Participant an amount not to exceed
the amount earned according to the terms of the Award.
6.3 Pro Rata Payment for Death or Disability; New Hires.
(a) Death or Disability. If during a Performance Period, a Participant's
employment is terminated by reason of the Participant's death or Disability,
then such Participant shall, if the Committee so determines, be eligible to
receive pro rata portion of the Incentive Compensation that would have been
payable to such Participant, if he or she had remained employed, based on the
number of days worked during the Performance Period. Such Incentive Compensation
shall be paid at the time and in the manner set forth in Section 6.1 hereof.
(b) New Hires; Promotions. Any individual who is newly-hired or becomes an
Eligible Employee during a Performance Period and who is selected by the
Committee to participate in the Plan shall be eligible to receive a pro rata
portion of the Incentive Compensation to which he or she could have been
entitled if he or she had been employed for the full Performance Period, based
on the number of days during the Performance Period during which he or she is a
Participant in the Plan and calculated on the basis of his or her Base Pay
received for the Performance Period. Such Incentive Compensation shall be paid
at the time and in the manner set forth in Section 6.1 hereof.
6.4 Recoupment for Restatements. Notwithstanding any other language in this
Plan, the Committee may recoup all or any portion of any Incentive Compensation
paid to a Participant, as set forth in the Policy for Repayment on Restated
Financial Statements (or any successor policy thereto) as approved by the
Company's Board from time to time.
6.5 Change in Control. In the event of a Change in Control, the Committee may,
in its sole discretion, but shall be under no obligation to, make a lump sum
payment to a Participant equal to a prorated amount of any potential Incentive
Compensation payable under any Award made to such Participant, calculated by
multiplying the amount payable for Target Achievement by the percentage of the
Performance Period completed prior to the Change in Control. In the event of
such a lump sum payment, no further Incentive Compensation shall be payable
under any such Award.
Article VII
Miscellaneous Provisions
7.1 Non-Assignability. A Participant may not alienate, assign, pledge, encumber,
transfer, sell or otherwise dispose of any rights or benefits awarded hereunder
prior to the actual receipt thereof; and any attempt to alienate, assign,
pledge, sell, transfer or assign prior to such receipt, or any levy, attachment,
execution or similar process upon any such rights or benefits shall be null and
void.
7.2 No Right To Continue In Employment. Nothing in the Plan confers upon any
employee the right to continue in the employ of the Company or any Subsidiary,
or interferes with or restricts in any way the right of the Company and its
Subsidiaries to discharge any employee at any time (subject to any contract
rights of such employee).
7.3 Indemnification Of Committee. No member of the Committee nor any officer or
employee of the Company acting with or on behalf of the Committee, shall be
personally liable for any action, determination, or interpretation taken or made
in good faith with respect to the Plan, and all members of the Committee, and
each officer or employee of the Company acting with it or on its behalf shall,
to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination or interpretation.
7.4 No Plan Funding. The Plan shall at all times be entirely unfunded, and no
provision shall at any time be made with respect to segregating assets of the
Company for payment of any amounts hereunder. No Participant, beneficiary, or
other person shall have any interest in any particular assets of the Company by
reason of the right to receive Incentive Compensation under the Plan.
Participants and beneficiaries shall have only the rights of a general unsecured
creditor of the Company.
7.5 Governing Law. This Plan shall be construed in accordance with the laws of
the State of Delaware and the rights and obligations created hereby shall be
governed by the laws of the State of Delaware.
7.6 Binding Effect. This Plan shall be binding upon and inure to the benefit of
the Company, its successors and assigns, and the Participants, and their heirs,
assigns, and personal representatives.
7.7 Construction of Plan. The captions used in this Plan are for convenience
only and shall not be construed in interpreting the Plan. Whenever the context
so requires, the masculine shall include the feminine and neuter, and the
singular shall also include the plural, and conversely.
7.8 Integrated Plan. This Plan constitutes the final and complete expression of
agreement with respect to the subject matter hereof.

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7.9 Tax Requirements. The Company (and, where applicable, its Subsidiaries)
shall have the power and the right to deduct or withhold, or require a
Participant to remit to the Company, an amount sufficient to satisfy applicable
taxes required by law to be withheld with respect to any payment of any
Incentive Compensation to a Participant.
7.10 Adjustments. In the event of (a) any merger, reorganization, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split,
combination of shares, rights, offering, extraordinary dividend (including a
spin-off), or other similar change affecting the Company's shares; (b) any
purchase, acquisition, sale, or disposition of a significant amount of assets
other than in the ordinary course of business, or of a significant business;
(c) any change resulting from the accounting effects of discontinued operations,
extraordinary income or loss, changes in accounting as determined under
generally accepted accounting principles, or restatement of earnings; or (d) any
charge or credit resulting from an item which is classified as “non-recurring,”
“restructuring,” or similar unusual item on the Company's audited annual
Statement of Income which, in the case of (a) - (d), results in a change in the
components of the calculations of any of the criteria upon which the Performance
Goals are based, as established by the Committee, in each case with respect to
the Company or any other entity whose performance is relevant to the achievement
of any Performance Goal included in an Award, the Committee shall, without the
consent of any affected Participant, amend or modify the terms of any
outstanding Award that includes any Performance Goal based in whole or in part
on the financial performance of the Company (or any Subsidiary or division
thereof) or such other entity so as equitably to reflect such event or events,
such that the criteria for evaluating such financial performance of the Company
or such other entity (and the achievement of the corresponding Performance Goal)
will be substantially the same (as determined by the Committee or the committee
of the board of directors of the surviving corporation) following such event as
prior to such event; provided, however, that the Committee shall not take any
action pursuant to this Section which would constitute an impermissible exercise
of discretion pursuant to Code Section 162(m).
Article VIII
Amendment or Discontinuance
Except as provided in Section 7.10, the Committee may at any time and from time
to time, without the consent of the Participants, alter, amend, revise, suspend,
or discontinue the Plan in whole or in part; provided that any amendment that
modifies any pre-established Performance Goal for a Participant who is a Covered
Employee (or his successor(s), as may be applicable) under this Plan with
respect to any particular Performance Period may only be effected on or prior to
that date which is ninety (90) days following the commencement of such
Performance Period (and in the case of a Performance Period less than a Fiscal
Year, such determination shall be made no later than the date that 25% of the
Performance Period has elapsed). In addition, the Board shall have the power to
discontinue the Plan in whole or in part and amend the Plan in any manner
advisable in order for Incentive Compensation granted under the Plan to qualify
as “performance-based” compensation under Code Section 162(m) (including
amendments as a result of changes to Code Section 162(m) or the regulations
thereunder to permit greater flexibility with respect to Incentive Compensation
granted under the Plan).
Article IX
Effect of the Plan
Neither the adoption of this Plan nor any action of the Board or the Committee
shall be deemed to give any Participant any right to be granted Incentive
Compensation or any other rights. In addition, nothing contained in this Plan
and no action taken pursuant to its provisions shall be construed to (a) give
any Participant any right to any compensation, except as expressly provided
herein; (b) be evidence of any agreement, contract or understanding, express or
implied, that the Company or any Subsidiary will employ a Participant in any
particular position; (c) give any Participant any right, title, or interest
whatsoever in or to any investments which the Company may make to aid it in
meeting its obligations hereunder; or (d) create a trust of any kind or a
fiduciary relationship between the Company and a Participant or any other
person.
Article X
Code Section 409A Compliance
This Plan is intended to comply with Code Section 409A and shall be interpreted
in a manner consistent with Code Section 409A and the treasury regulations and
guidance issued thereunder. To the extent (i) any payment to which a Participant
becomes entitled under this Plan in connection with the Participant's
termination of service with the Company (for reasons other than death)
constitutes a payment of deferred compensation subject to Code Section 409A, and
(ii) the Participant is deemed at the time of such termination to be a
“specified employee” under Code Section 409A to whom the following provisions
must apply, then such payment shall not be made or commence until the earliest
of (A) the expiration of the six (6) month period measured from the date of
Participant's termination of service with the Company; or (B) the date of the
Participant's death following such termination of service. Upon the expiration
of the applicable deferral period, any payment which would have otherwise been
made during that period in the absence of this Article X shall be made to the
Participant or the Participant's beneficiary.

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Article XI
Term
The effective date of this Plan shall be as of January 1, 2013, subject to
stockholder approval. The material terms of this Plan shall be disclosed and
submitted to the stockholders of the Company at the next annual meeting of
stockholders and thereafter every five (5) years (unless earlier terminated) for
approval in accordance with the requirements of Code Section 162(m). This Plan
and any benefits granted hereunder shall be null and void if stockholder
approval is not obtained at the applicable meeting of stockholders of the
Company, and no award or payment of Incentive Compensation under this Plan to
any Covered Employee shall be made unless such applicable stockholder approval
is obtained. This Plan shall remain in effect until it is terminated by the
Committee or the Board.