Exhibit 10.1

 

As initially approved by the Board of Directors on February 15, 2007

and by the stockholders on April 20, 2007, and

as amended by the Board of Directors on February 28, 2012

 

CRA INTERNATIONAL, INC.

 

CASH INCENTIVE PLAN

 

1.                                       Purpose of the Plan.  The purpose of
the CRA International, Inc. Cash Incentive Plan is to promote the growth and
performance of the Company by: (i) linking a portion of the total compensation
for certain key employees to attainment of such corporate, subsidiary and
business unit objectives as shall be approved by the Committee for each Plan
Year or other Award Period; and (ii) assisting in the attraction, retention and
motivation of certain key employees.

 

2.                                       Definitions.  Wherever the following
capitalized terms are used in the Plan, they shall have the meanings specified
below:

 

“Affiliate” means any entity that is directly or indirectly controlled by the
Company or any entity in which the Company has a significant ownership interest,
as determined by the Committee.

 

“Award Period” means the Plan Year under which the Performance Award relates, or
such longer period as may be specified by the Company or the Committee at the
time a Performance Award is granted.

 

“Board” means the Board of Directors of the Company.

 

“Change of Control” shall have the meaning set forth in Section 13.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Committee” means a committee of the Board designated by the Board to administer
the Plan which shall be comprised solely of Independent Directors.

 

“Company” means CRA International, Inc., a Massachusetts corporation.

 

“Director” means a member of the Board.

 

“Employee” means any salaried employee of the Company, any Subsidiary or any
Affiliate, including any officers or Executive Officers (whether or not a
Director), who is treated as an employee in the personnel records of the Company
or its Subsidiaries or Affiliates for the relevant period, but shall exclude
individuals who are classified by the Company, any Subsidiary or any Affiliate
as (i) otherwise employed by a third party; (ii) independent contractors; or
(iii) intermittent or temporary, in each case even if any such classification is
changed retroactively as a result of an audit, litigation, or otherwise.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Executive Officer” means a Participant the Board has designated as an executive
officer of the Company for purposes of reporting under the Exchange Act.

 

“Independent Director” means a Director who is not an Employee and who qualifies
as (i) a “non-employee director” under Rule 16b-3(b)(3) under the Exchange Act,
(ii) an “outside director” under Section 162(m) of the Code, and (iii) an
“independent director” under the rules and listing standards adopted by the
NASDAQ Exchange.

 

“Participant” means any Employee designated by the Board, the Committee or the
Chief Executive Officer of the Company to participate in the Plan for a Plan
Year, a portion of a Plan Year, or a longer period.

 

“Performance Award” means a right to receive an incentive payment payable in
cash or stock at the discretion of the Company pursuant to the terms and
conditions of the Plan.

 

“Performance Factors” means the factors selected by the Committee from time to
time, including, but not limited to, the following measures to determine whether
the performance goals established by the Committee and applicable to Performance
Awards have been satisfied: revenue; net revenue; revenue growth; net revenue
growth; earnings before interest, taxes, depreciation and amortization
(“EBITDA”); funds from operations; funds from operations per share; operating
income (loss); operating income growth; operating cash flow; net income; net
income growth; pre- or after-tax income (loss); cash available for distribution;
cash available for distribution per share; cash and/or cash equivalents
available for operations; net earnings (loss); earnings (loss) per share;
earnings per share growth; return on equity; return on assets; share price
performance; total shareholder return; total shareholder return growth; economic
value added; improvement in cash-flow; and confidential business unit
objectives.

 

“Performance Formula” means, for an Award Period, the one or more objective
formulas applied against the relevant Performance Factors to determine, with
regard to the Performance Award of a particular Participant, whether all, some
portion but less than all, or none of the Performance Award has been earned for
the Award Period.

 

“Plan” means this CRA International, Inc. Cash Incentive Plan, as amended from
time to time.

 

“Plan Year” means a fiscal year of the Company.

 

“Qualified Performance-Based Award” means any Performance Award or portion of a
Performance Award that is intended to satisfy the requirements for “qualified
performance-based compensation” under Section 162(m) of the Code.

 

“Subsidiary” means any entity, either directly or indirectly, of which the
Company owns or controls 50% or more of the outstanding shares of stock normally
entitled to vote for the election of directors or of comparable equity
participation and voting power.

 

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3.                                       Administration of Plan.

 

a.               Powers of the Committee; Discretion.  The Plan shall be
administered by the Committee.  Subject to the terms of the Plan, the Committee
shall have such powers and authority as may be necessary or appropriate for the
Committee to carry out its functions as described in the Plan. The Committee
shall have the authority in its discretion to determine: (i) which Employees
shall receive Performance Awards; (ii) the amount and type of the Performance
Awards; and (iii) the objectives and the other terms and conditions of such
Performance Awards, including the Performance Factors and other terms and
conditions of a Performance Award. Determinations by the Committee under the
Plan, including without limitation, determinations of the Participants, the
amount and timing of Performance Awards, the terms and provisions of Performance
Awards, need not be uniform and may be made selectively among Participants who
receive or are eligible to receive Performance Awards. The Committee shall have
the full power, discretion and authority to interpret the Plan, to establish,
amend, suspend and rescind any rules and regulations relating to the Plan and to
make all other determinations that it deems necessary or 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 Performance Award in
the manner and to the extent it shall deem desirable to carry it into effect.
All such determinations shall be final, conclusive and binding on all persons
(including the Company and Participants) and for all purposes.

 

b.              Board Authority.  If the Committee does not exist, or for any
other reason determined by the Board, the Board may take any action under the
Plan that would otherwise be the responsibility of the Committee.

 

c.               Delegation of Authority to Senior Officers.  The Committee may
delegate, on such terms and conditions as it determines in its sole and plenary
discretion, to one or more senior officers of the Company the authority to make
grants of Performance Awards to officers (other than Executive Officers),
employees and consultants of the Company and its Affiliates (including any
prospective officer, employee or consultant). In the event that the Committee’s
authority is delegated to senior officers in accordance with the foregoing, all
references in the Plan relating to the Committee shall be interpreted in a
manner consistent with the foregoing by treating any such reference as a
reference to such senior officer for such purpose. Any action undertaken in
accordance with the Committee’s delegation of authority hereunder shall have the
same force and effect as if such action was undertaken directly by the Committee
and shall be deemed for all purposes of the Plan to have been taken by the
Committee.

 

d.              Limitation on Liability.  No member of the Board or Committee,
nor any senior officer delegated authority by the Committee, shall be liable for
any action or determination made in good faith by the Board, Committee or such
senior officer with respect to the Plan or any Performance Award.

 

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4.                                       Eligibility; Designation of
Participants.  The Committee shall, in its sole discretion, designate within the
first 90 days of an Award Period (or, if shorter, within the maximum period
allowed under Section 162(m) of the Code) which Participants will be eligible to
receive Performance Awards in respect of such Award Period. However, designation
of a Participant eligible to receive a Performance Award hereunder for an Award
Period shall not in any manner entitle the Participant to receive payment in
respect of any Performance Award for such Award Period. The determination as to
whether or not such Participant becomes entitled to payment in respect of any
Performance Award shall be decided solely in accordance with the provisions of
this Plan.  Moreover, designation of a Participant eligible to receive a
Performance Award hereunder for a particular Plan Year or other Award Period
shall not require designation of such Participant eligible to receive a
Performance Award hereunder in any subsequent Plan Year or Award Period and
designation of one person as a Participant eligible to receive a Performance
Award hereunder shall not require designation of any other person as a
Participant eligible to receive a Performance Award hereunder in such period or
in any other period.

 

5.                                       Establishment of Performance Awards.

 

a.               General.  Within the first 90 days of a Award Period (or, if
shorter, within the maximum period allowed under Section 162(m) of the Code),
the Committee shall, with regard to the Performance Awards to be issued for such
Award Period, exercise its discretion with respect to establishing Performance
Awards consistent with this Plan which shall be deemed “qualified
performance-based compensation” under Section 162(m) of the Code, and record the
same in writing.

 

b.              Performance Factors.  Participants shall have the payout of
their Performance Awards, if any, determined on the basis of the degree of
achievement of Performance Factors which shall be established by the Committee
in writing and which Performance Factors 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 Performance Factors. The Committee
shall, for each Award Period, establish the Performance Factors to apply to each
Participant and a formula or matrix prescribing the extent to which such
Participant’s incentive award shall be earned based upon the degree of
achievement of such Performance Factor or Performance Factors. The Committee may
determine that the Performance Award payable to any Participant shall be based
upon the attainment of Performance Factors comparable to those in whole or in
part applied to the results of a Subsidiary, division or business unit.  With
respect to Performance Awards intended to be Qualified Performance-Based Awards,
the Committee shall determine the Performance Factors and any related formula or
matrix for each Participant not later than 90 calendar days after the beginning
of the Award Period (or, if shorter, within the maximum period allowed under
Section 162(m) of the Code).

 

c.               Transfer of Employment.  A Participant’s Performance Factors
may be changed by the Committee during the Award Period to reflect a change in
responsibilities provided that, in the case of Performance Awards intended to be
Qualified Performance-Based Awards, any such change shall be made in a manner
consistent with Section 162(m) of the Code.

 

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d.              Modification of Performance Factors.  The Committee is
authorized at any time during the first 90 days of an Award Period (or, if
shorter, within the maximum period allowed under Section 162(m) of the Code), or
any time thereafter (but only to the extent the exercise of such authority after
such 90-day period (or such shorter period, if applicable) would not cause the
Performance Awards granted to any Participant for the Award Period to fail to
qualify as “qualified performance-based compensation” under Section 162(m) of
the Code), in its sole and plenary discretion, to adjust or modify the
calculation of a Performance Factor for such Award Period to the extent
permitted under Section 162(m) of the Code (A) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction, event
or development affecting the Company, or any of its Affiliates, Subsidiaries,
divisions or operating units (to the extent applicable to such Performance
Factor) or (B) in recognition of, or in anticipation of, any other unusual or
nonrecurring events affecting the Company or any of its Affiliates,
Subsidiaries, divisions or operating units (to the extent applicable to such
Performance Factor), or the financial statements of the Company or any of its
Affiliates, Subsidiaries, divisions or operating units (to the extent applicable
to such Performance Factor), or of changes in applicable rules, rulings,
regulations or other requirements of any governmental body or securities
exchange, accounting principles, law or business conditions.

 

6.                                       Participation by Executive Officers.

 

a.               Qualified Performance-Based Awards.  Notwithstanding any other
provisions of the Plan to the contrary, the following provisions shall be
applicable to participation in the Plan by Executive Officers who are subject to
Section 162(m) of the Code.

 

i.                  Each such Participant’s Performance Award payable under this
Plan for an Award Period shall be based solely on achievement of one or more of
the Performance Factors as established by the Committee pursuant to Section 5
above and the Committee shall not have the discretion provided in Section 5 to
increase the amount of the Performance Award payable under this Plan, but it
shall in all cases have the ability to reduce the amount of any Performance
Award that would otherwise be payable (including a reduction in such amount to
zero) as set forth in Section 7(d).

 

ii.               With respect to each such Participant, no Performance Award
intended to be a Qualified Performance-Based Award shall be payable hereunder
except upon written certification by the Committee that the Performance Factors
have been satisfied to a particular extent pursuant to Section 7(c) and that any
other material terms and conditions precedent to payment of the Performance
Award pursuant to the Plan have been satisfied.

 

b.              Maximum Award.  Notwithstanding any provisions of the Plan to
the contrary, the maximum Performance Award payable to any Participant who is an
Executive Officer for any Plan Year shall be $8,000,000; provided, however, that
if such a Participant is not a Participant for the entire Plan Year, the maximum
amount payable shall be pro-rated based on the number of days the individual was
a Participant for the Plan Year, and provided further that to the extent that
the Award Period is longer than a Plan Year, the

 

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value of the Performance Award shall be pro-rated for the time in the Award
Period and the amount attributable to a Plan Year shall not exceed $8,000,000.

 

7.                                       Payment of Performance Award.

 

a.               Payment of Performance Awards.  A Participant must be employed
by the Company on the last day of an Award Period to be eligible for payment in
respect of a Performance Award for such Award Period.  Notwithstanding the
foregoing, in the sole discretion of the Committee, Performance Awards may be
paid to Participants who have retired or whose employment has terminated after
the beginning of the Award Period for which a Performance Award is made, or to
the designee or estate of a Participant who died prior to the last day of an
Award Period, pursuant to the terms of the Plan, including but not limited to
Section 7.b below.

 

b.              Limitation.  A Participant shall be eligible to receive payments
in respect of a Performance Award only to the extent that (1) the Performance
Factor(s) for such Award Period are achieved and certified by the Committee in
accordance with Section 7(c) and (2) the Performance Formula(s) as applied
against such Performance Factor(s) determines that all or some portion of such
Participant’s Performance Award has been earned for the Award Period.

 

c.               Certification.  Following the completion of an Award Period,
the Committee shall meet to review and certify in writing whether, and to what
extent, the Performance Factor(s) for the Award Period have been achieved and,
if so, to calculate and certify in writing that amount of the Performance Award
earned for the Award Period based upon the Performance Formula. The Committee
shall then determine the actual size of each Participant’s Performance Award for
the Award Period and, in so doing, may apply negative discretion as authorized
by Section 7(d).

 

d.              Negative Discretion.  In determining the actual size of an
individual Performance Award for an Award Period, the Committee may, in its sole
and plenary discretion, reduce or eliminate the amount of the Performance Award
earned in the Award Period, even if applicable Performance Factors have been
attained.

 

e.               Timing of Award Payments.  The Performance Awards granted for
an Award Period shall be paid to Participant(s) as soon as administratively
possible following completion of the certifications required by Section 7(c),
unless the Performance Award is deferred pursuant to Section 15.

 

f.                 Method of Payments.  Notwithstanding anything to the contrary
in this Plan, the Company in its sole discretion may satisfy any amounts payable
under a Performance Award in shares of common stock of the Company (“Common
Stock”) with an aggregate fair market value equal to the cash amount that would
otherwise be payable.  For purposes of this Plan, the fair market value of a
share of Common Stock shall be the closing price per share as reported on a
nationally recognized stock exchange, or, if shares of Common Stock are not
listed on such an exchange, the mean of the bid and

 

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asked prices per share as reported on the principal over-the-counter market in
which the shares of Common Stock are trading, or if shares of Common Stock are
not traded over-the-counter, the fair market value as determined by the
Committee.

 

8.                                       Unfunded Plan.  A Participant’s
interest in any Performance Awards hereunder 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 the payment of its obligations hereunder nor
shall the Company be required to reserve or set aside funds therefor.

 

9.                                       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 without the Company’s consent. 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. In the event no beneficiary has been properly designated,
the payment shall be made to the Participant’s surviving spouse or, if none, the
Participant’s estate.

 

10.                                 Withholding for Taxes.  Notwithstanding any
other provisions of this Plan, the Company shall have the authority to 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.

 

11.                                 No Right to Continued Employment or to
Participate.  Nothing in the Plan or in the grant of any Award shall interfere
with or limit in any way the right of the Company or any of its Subsidiaries or
Affiliates to terminate a Participant’s employment at any time, nor confer upon
any Participant any right to continued employment with the Company or any of its
Subsidiaries or Affiliates. Neither the adoption of the Plan nor any action by
the Committee shall be deemed to give any Employee any right to be designated as
a Participant under the Plan.

 

12.                                 Non-Exclusivity of Plan.  This Plan is not
intended to and shall not preclude the Board from adopting, continuing, amending
or terminating such additional compensation arrangement as it deems desirable
for Employees.

 

13.                                 Change of Control.  A Change of Control
shall mean (i) if the Company is merged with or into or consolidated with
another corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into other voting securities of the surviving entity) at least fifty percent
(50%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (ii) if the Company is liquidated, or sells or otherwise
disposes of substantially all of its assets to another corporation or entity
while Performance Awards remain

 

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outstanding under the Plan. In the event of a Change of Control, unless
otherwise provided in the applicable Performance Award agreement, or unless
provision is made in connection with the Change of Control event for (a)
assumption of Performance Awards previously granted or (b) substitution for such
Performance Awards of new awards covering stock of a successor corporation or
its “parent corporation” (as defined in Section 424(e) of the Code) or
“subsidiary corporation” (as defined in Section 424(f) of the Code) with
appropriate adjustments as to the number and kinds of shares and the exercise
prices, if applicable, all Performance Awards shall be paid out as if the date
of the Change of Control event were the last day of the applicable Award Period
and Performance Factors had been attained.

 

14.                                 Impact of Restatement of Financial
Statements upon Previous Awards.  If any of the Company’s financial statements
are restated as a result of errors, omissions, or fraud, the Committee may (in
its sole discretion, but acting in good faith) direct that the Company recover
all or a portion of any such Performance Award or payment made to any, all or
any class of Participants with respect to any Plan Year the financial results of
which are negatively affected by such restatement. The amount to be recovered
from any Participant shall be the amount by which the affected Performance Award
or payment exceeded the amount that would have been payable to such Participant
had the financial statements been initially filed as restated, or any greater or
lesser amount (including, but not limited to, the entire Award) that the
Committee shall determine. The Committee may determine to recover different
amounts from different Participants or different classes of Participants on such
basis as it shall deem appropriate. In no event shall the amount to be recovered
by the Company from a Participant be less than the amount required to be repaid
or recovered as a matter of law. The Committee shall determine whether the
Company shall effect any such recovery (i) by seeking repayment from the
Participant, (ii) by reducing (subject to applicable law and the terms and
conditions of the applicable plan, program or arrangement) the amount that would
otherwise be payable to the Participant under any compensatory plan, program or
arrangement maintained by the Company, a Subsidiary or any of its Affiliates,
(iii) by withholding payment of future increases in compensation (including the
payment of any discretionary bonus amount) or grants of compensatory awards that
would otherwise have been made in accordance with the Company’s otherwise
applicable compensation practices, or (iv) by any combination of the foregoing
or otherwise.

 

15.                                 Deferral.

 

a.               Section 162(m) Related Deferral.  Notwithstanding anything
contained herein to the contrary, in the event that all or a portion of a
Participant’s Performance Award shall be ineligible for treatment as “qualified
performance-based compensation” under Section 162(m) of the Code, the Committee,
in its sole discretion and pursuant to Section 409A of the Code, may provide
that any amount payable pursuant to such Performance Award that would not be
deductible by the Company as a result of the application of Section 162(m) shall
be deferred and paid to the Participant in the first year in which the
compensation is deductible for tax purposes.

 

b.              Deferrals.  The Committee may, in its discretion, permit a
Participant to defer the receipt of payment of cash that would otherwise be due
to the Participant. If any such deferral is

 

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to be permitted by the Committee, the Committee shall establish rules and
procedures relating to such deferral in a manner intended to comply with the
requirements of Section 409A of the Code, including, without limitation, the
time when an election to defer may be made, the time period of the deferral and
the events that would result in payment of the deferred amount, and the interest
or other earnings attributable to the deferral.

 

16.                                 Amendment or Termination.  Until such time
as a “Change of Control” shall have occurred, the Board or the Committee may, in
its sole discretion, amend, suspend or terminate the Plan from time to time,
subject to any requirement for shareholder approval imposed by applicable law,
including Section 162(m) of the Code, and the listing requirements of the NASDAQ
Exchange. Except as provided in Section 5(d) 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.

 

17.                                 Application of Code Section 409A.  To the
extent applicable, this Plan is intended to be administered and interpreted in a
manner that is consistent with the requirements of Section 409A of the Code.
Notwithstanding the foregoing, no particular tax result with respect to any
income recognized by a Participant in connection with the Plan is guaranteed and
each Participant shall be responsible for any taxes imposed on him in connection
with the Plan.

 

18.                                 Tax Penalty Avoidance.  The provisions of
this Plan are not intended, and should not be construed, to be legal, business
or tax advice. The Company and any other party having any interest herein are
hereby informed that the U.S. federal tax advice contained in this document (if
any) is not intended or written to be used, and cannot be used, for the purpose
of (i) avoiding penalties under the Code or (ii) promoting, marketing or
recommending to any party any transaction or matter addressed herein.

 

19.                                 Governing Law and Interpretation.  The
validity, construction, and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the laws of the
Commonwealth of Massachusetts, without regard to the conflict of law principles
thereof. Unless otherwise indicated, all “Section” references are to sections of
the Plan. References to any law, rule or regulation shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing, or
interpreting such law, rule or regulation.

 

20.                                 Severability.  Notwithstanding any other
provision or Section of the Plan, if any provision of the Plan is or becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to
any person or award, or would disqualify the Plan or any award under any law
deemed applicable by the Board or the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws (but only to such
extent necessary to comply with such laws), or if it cannot be construed or
deemed amended without, in the determination of the Board or the Committee,
materially altering the intent of the Plan or award, such provision shall be
stricken as to such jurisdiction, person or award and the remainder of the Plan
and any such award shall remain in full force and effect.

 

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21.                                 Effective Date.  The Plan was initially
effective for the Company’s 2007 fiscal year.  If this Plan is approved at the
2012 annual meeting of the Company’s shareholders (or any special meeting held
in lieu thereof), it will remain effective until the first annual meeting of the
Company’s shareholders (or any special meeting held in lieu thereof) held in the
2017 fiscal year, subject to any further shareholder approvals (or reapprovals)
mandated for qualified performance-based compensation under Section 162(m) of
the Code, and subject to the right of the Board to terminate the Plan, on a
prospective basis only, at any time. If this Plan is not approved at the 2012
annual meeting of the Company’s shareholders (or any special meeting held in
lieu thereof), it will remain effective until the annual meeting of the
Company’s shareholders (or any special meeting held in lieu thereof) held in the
2012 fiscal year, subject to the right of the Board to terminate the Plan, on a
prospective basis only, at any time.  The foregoing notwithstanding, if the Plan
is terminated as a result of not being approved or re-approved by the Company’s
shareholders as mandated for qualified performance-based compensation under
Section 162(m) of the Code, (i) any award granted pursuant to this Plan that is
outstanding as of such termination shall remain subject to the terms and
conditions of the Plan, and (ii) any award granted pursuant to this Plan that
was intended to be Qualified Performance-Based Compensation and that is
outstanding as of such termination shall remain Qualified Performance-Based
Compensation to the extent permitted by Section 162(m) of the Code and the
United States Treasury Regulations promulgated thereunder.

 

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