Exhibit 10.2

 

CUBIC CORPORATION

 

MANAGEMENT INCENTIVE BONUS PLAN

 

This Incentive Bonus Plan (the “Plan”) is intended to provide an additional
incentive for management employees of Cubic Corporation and its subsidiaries
(collectively, the “Company”), to perform to the best of their abilities, to
further the growth, development and financial success of the Company, and to
enable the Company to attract and retain highly qualified employees.  The Plan
is for the benefit of the Participants (as defined below).

 

The Compensation Committee (the “Committee”) of the Board of Directors of the
Company (the “Board”) has adopted this amended and restated Plan, effective
November 12, 2018.

 

1.         Participants.  Participation in the Plan shall be limited to such
employees of the Company and its subsidiaries whom the Committee from time to
time determines shall be eligible to receive a bonus award (a “Bonus”) hereunder
(the “Participants”).

 

2.         Administration.  The Plan shall be administered by the
Committee.  The Committee shall have the discretion and authority to administer
and interpret the Plan, including the authority to establish bonus programs or
guidelines under the Plan (the “Bonus Guidelines”) from time to time containing
such terms and conditions as the Committee may determine or deem appropriate in
its discretion, including, without limitation, terms and conditions relating to
the administration of the Plan and/or the determination and payment of Bonuses
hereunder.

 

The Committee may modify, suspend, terminate or supersede the Bonus Guidelines
at any time in its sole discretion.  Any and all Bonus Guidelines adopted by the
Committee shall be subject to the terms and conditions of the Plan.  Any
disputes under the Plan shall be resolved by the Committee or its designee,
whose decision will be final.

 

3.         Performance Goals.  The Plan is intended to provide incentives for
the achievement of approved annual corporate, business unit and/or individual
objectives (the “Performance Goals”), as determined by the Committee with
respect to each fiscal year during the term of the Plan (each an “Incentive Plan
Year”).

 

(a)        Corporate Performance Goals.  At the beginning of each Incentive Plan
Year, the Committee shall select such objective corporate Performance Goals as
the Committee may determine in its sole discretion, which may include, without
limitation, one or more of the following criteria:  net earnings (either before
or after one or more of the following: interest, taxes, depreciation,
amortization, and goodwill or other impairment charges, “EBITDA”, or Adjusted
EBITDA as the committee may define); gross or net sales or revenue; net income
(either before or after taxes); adjusted net income; net operating income,
operating earnings; cash flow (including, but not limited to, operating cash
flow and free cash flow); return on net or gross assets; return on capital;
return on shareholders’ equity; total stockholder return; return on sales; gross
or net profit or operating margin; costs; acquisitions or new investments;
leverage level; expenses; working capital; earnings per share; adjusted earnings
per share; funds from operations per share; price per share of the Company’s
common stock; implementation or completion of critical projects;

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comparisons with various stock market indices; debt reduction; shareholder
equity; operating efficiency; financial ratios; and financing and other capital
raising transactions.  Unless otherwise determined by the Committee, it is
intended that the corporate objectives be objectively determinable, with the
weighting of the various corporate Performance Goals to be approved by the
Committee.

(b)        Business Unit Goals.  Each year corporate and business unit
management will establish a set of Performance Goals for recommendation to the
Committee, applicable to each specific business unit, which may consider, in
addition to any of the applicable goals set forth in the Corporate Performance
Goals: corporate financial objectives, business unit past experience, the
business units current business plan, any specific business emphasis appropriate
at the time for the subject business unit for the year under consideration, and
future business potential.  A portion of the award may be discretionary, as
determined by the Committee.

(c)        Individual Performance Goals.  A portion of each Participant’s Bonus
may be determined in the sole discretion of the Committee based on individual
performance and the consideration of such other factors as the Committee
determines to be appropriate.  If individual Performance Goals are to be
established for an Incentive Plan Year, each Participant in the Plan will work
with his or her direct manager and/or other appropriate manager to develop a
list of key individual Performance Goals.  If appropriate, the Chief Executive
Officer of the Company will work with the Committee to develop his individual
Performance Goals.

A Performance Goal may be a single goal or a range with a minimum goal up to a
maximum goal.  Unless otherwise determined by the Committee, the amount of each
Participant’s Bonus shall be based upon a bonus formula determined by the
Committee in its sole discretion that ties such Bonus to the attainment of the
applicable Performance Goals.  The Committee may in its sole discretion modify
or change the bonus formulas and/or Performance Goals at any time and from time
to time during or upon completion of an Incentive Plan Year.

4.         Target Bonuses.  Each Participant will be assigned a “Target Bonus
Percentage” based on his or her job classification and responsibilities.  If a
Participant moves from one Target Bonus Percentage level to another during an
Incentive Plan Year, his or her Target Bonus Percentage will be prorated for
time spent in positions with different Target Bonus Percentages during the
Incentive Plan Year.

A “Target Bonus” for each Participant will be determined by multiplying his or
her Target Bonus Percentage by his or her Base Salary (as defined below) for the
relevant Incentive Plan Year.  For purposes of this Plan, “Base Salary” shall
mean the Participant’s annual nominal salary, including salary paid during
holidays and personal time off, even if the effective date of the salary is
delayed for administrative reasons. If there is a change in base salary during
the year at times other than the beginning of the fiscal year, the "Base Salary"
for purposes of determining the Target Bonus shall be prorated for the number of
days in the fiscal year before and after the salary change.

The Target Bonus Percentages for each Participant shall be approved by the
Committee for each Incentive Plan Year.  A Participant’s maximum Bonus under the
Plan shall not exceed 260% of his or her Target Bonus.

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Unless and until changed by the Committee, in its sole discretion, the Target
Bonus Percentages for the executive officers of the Company for purposes of this
Plan shall be as follows:

 

Position

    

Target Bonus Percentage
(as % of Base Salary)

 

 

 

 

 

Chief Executive Officer

 

100

 

Chief Financial Officer

 

80

 

Other Key Corporate Officers

 

60

 

Business Unit Presidents

 

70

 

Senior Business Unit Officers

 

50

 

Other Key Personnel

 

20-40

 

 

5.         Sliding Scale.  With respect to the corporate and business unit
Performance Goals, a sliding scale of award determination will be used so that
the incentive earned will decrease from 100% based on performance of less than
100% of the Performance Goal with the opportunity to earn up to 200% of the
target award should actual performance exceed 100% of the Performance Goal. The
sliding scale will be determined by the Committee each year for each Performance
Goal.

The individual component of each Participant’s Bonus will be evaluated
separately.  Based on the determination of the Participant’s individual
performance, a multiplier will be applied to the Participant’s Bonus as
determined based on achievement relative to the corporate and/or business unit
Performance Goals.  The multiplier for individual performance will be within the
range of 0% to 130%.

6.         Calculation of Bonuses.  The actual Bonus for a Participant will be
calculated by the Committee as soon as practicable following the completion of
the relevant Incentive Plan year by applying the sliding scale to the Target
Bonus for such Participant according to the weightings and methods approved by
the Committee for such Incentive Plan Year.  The individual multiplier, if any,
will then be multiplied by the resulting Bonus to determine the final Bonus for
such Participant.

The incentive awards are based on the actual financial performance achieved by
the respective business unit and the total corporation as reflected in the
Company's audited financial statements. If there are to be any adjustments to
the audited results for the purposes of a Bonus determination, these adjustments
will be approved by the Committee or established at the time the Performance
Goals are set. Achievement of the financial goals will be calculated after
deduction of the Bonus payments related to this Plan for the Plan Year and to
any other applicable incentive plans.

The Company may, in its discretion, reduce or eliminate a Bonus otherwise
payable to any Participant.  Any such reduction or elimination may be made based
on objective or subjective determinations as the Company determines appropriate.

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7.         Payment of Bonuses.  The payment of Bonuses under the Plan shall be
made in cash between November 1 and December 31 of the calendar year following
the Incentive Plan Year to which such Bonuses relate, on such date or dates
determined by the Committee and shall be subject to such terms and conditions as
may be determined by the Committee in its sole discretion.

Except as otherwise provided in a written employment agreement between a
Participant and the Company or as otherwise determined by the Committee, in
order to be entitled to receive such Bonus, a Participant must be an active
employee of the Company or its subsidiaries or affiliates and in good standing
and working on the last day of the Plan Year. However, there will be two
exceptions to this provision.  First, should an employee elect full retirement
(with the sum of the employee’s age and years of service totaling 85 or more, or
at the age of 65), the Bonus will be prorated for the time elapsed during the
Incentive Plan Year prior to retirement and that amount paid in accordance with
the provisions above, as long as the business unit, subsidiary or total company,
achieves its financial goals.  Second, if an employee dies, or becomes totally
and permanently disabled, the Bonus will be pro-rated for the time elapsed
during the Incentive Plan Year prior to death or disability, and that amount
will be paid to his/her estate, or him/her as the case may be, in accordance
with the provisions above, as long as the business unit, subsidiary or total
company achieves its financial goals.

An employee may be excluded from receiving a Bonus in the event he/she is
involuntarily terminated for any reason other than a lay off during the period
from the last day of the respective fiscal year and the date that the Bonus
would normally be paid.  In addition, an employee may be excluded if the terms
and conditions of a separation agreement specifically exclude the receipt of the
incentive award.

8.         Amendment, Suspension and Termination of the Plan.  The Committee
shall have the authority to amend, suspend or terminate the Plan at any time in
its sole discretion.

 

9.         Miscellaneous.

 

(a)        The Company shall deduct all federal, state, and local taxes required
by law or Company policy from any Bonuses paid hereunder.

(b)        Nothing contained in this Plan shall confer upon any Participant any
right to continue in the employ of the Company or shall interfere with or
restrict in any way the right of the Company, which is hereby expressly
reserved, to discharge any Participant at any time for any reason whatsoever,
with or without cause.  Notwithstanding anything to the contrary contained in
the Plan, nothing in the Plan shall adversely affect any rights that a
Participant may otherwise have under an employment or severance agreement or
plan with or maintained by the Company to which such Participant is a party or
under which such Participant is a beneficiary.

(c)        The Plan shall be unfunded.  Amounts payable under the Plan are not
and will not be transferred into a trust or otherwise set aside.  The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any Bonus under the
Plan.  Any accounts under the Plan are for bookkeeping purposes only and do not
represent a claim against the specific assets of the Company.

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(d)        No Bonus granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated. All rights with respect to a
Bonus granted to a Participant under the Plan shall be available during his or
her lifetime only to the Participant.

(e)        Notwithstanding anything in the Plan to the contrary, any and all
amounts payable to any Participant under the Plan from time to time may, in the
Committee’s sole discretion, be reduced or offset by any amounts then due or
owing by such Participant to the Company or any of its affiliates pursuant to or
in accordance with any benefit or compensation plan, program, policy or
arrangement maintained by the Company or such affiliates.

(f)        Any provision of the Plan that is prohibited or unenforceable shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of the Plan.

(g)        The Plan shall be construed, interpreted and the rights of the
parties determined in accordance with the laws of the State of California.
Should any provision of the Plan be determined by a court of law to be illegal
or unenforceable, the other provisions shall nevertheless remain effective and
shall remain enforceable.

(h)        Any and all controversies or disputes involving, relating to, or
arising out of, or under, this Plan, including but not limited to its
construction, interpretation or enforcement, shall be litigated exclusively in
the state or federal courts sitting in San Diego County, California.  Each
Participant is hereby deemed to irrevocably and unconditionally consent to the
personal jurisdiction of the state courts in San Diego County, California with
regard to any and all controversies or disputes involving, relating to, or
arising out of, or under, the Plan.  Each Participant is further deemed to
irrevocably and unconditionally waive any defense or objection of lack of
personal jurisdiction over Participant by the state or federal courts sitting in
San Diego County, California.

(i)         Bonus payments are not intended to constitute a deferral of
compensation subject to Section 409A of the Code and are intended to satisfy the
“short-term deferral” exemption under Section 409A of the Code and the Treasury
Regulations issued thereunder.  Accordingly, to the extent necessary to cause
Bonus payments hereunder to satisfy the “short-term deferral” exemption under
Section 409A of the Code and the Treasury Regulations issued thereunder, a Bonus
payment shall be made not later than the later of: (i) the fifteenth day of the
third month following the Participant’s first taxable year in which the Bonus
payment is no longer subject to a substantial risk of forfeiture, or (ii) the
fifteenth day of the third month following the Company’s first taxable year in
which the Bonus payment is no longer subject to a substantial risk of
forfeiture; provided,  however, that if due to administrative reasons Bonuses
are not paid within the foregoing time periods, then such Bonuses will be paid
as soon as administratively feasible but no later than the last day of the
calendar year following the end of the Incentive Plan Year to which such Bonuses
relate.

 

 

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