EXHIBIT 10.3


 


MARTEN TRANSPORT, LTD.


 


PERFORMANCE INCENTIVE BONUS PLAN


 


I.                                         GENERAL


 


A.                                   Plan Purpose. In an effort to maintain a position of
leadership in the highly competitive business segments in which Marten
Transport, Ltd. (the “Company”) competes, it is necessary to promote the financial
interests of the Company and its Subsidiaries, including its growth, by
attracting and retaining highly qualified employees possessing outstanding
ability, motivating such employees by means of performance related incentives,
and providing incentive compensation opportunities which are competitive with
those of similar corporations. The Marten Transport, Ltd. Performance Incentive
Bonus Plan (the “Plan”) is designed to assist the
Company in attaining these objectives.


 


B.                                     Cash Bonus Plan. The Plan is a cash bonus plan and is not
intended to be (and shall not be construed and administered as) a deferred compensation
plan or an employee benefit plan within the meaning of ERISA. Bonus Awards
under this Plan are intended to be discretionary and shall not constitute a part of
an employee’s regular rate of pay for any purpose.


 


C.                                     Term. The provisions of the Plan shall continue indefinitely
subject to termination by the Company; however, the Committee shall, in its
sole and absolute discretion, determine each year whether Bonus Awards will be
granted for such year.


 


D.                                    Definitions. Unless the context requires otherwise, the
following terms when used with initial capitalization have the following
meanings:


 


Award Year — The
calendar year for which Bonus Awards, if any, are calculated under the Plan.


 


Base Salary – The
annual base compensation paid to a Participant for an Award Year and base pay
not paid during the Award Year as a result of an earnings reduction election
under a Code section 125 cafeteria plan or any deferred compensation plan
or other arrangement.


 


Board — The Board of
Directors of the Company.


 


Bonus Award – The
cash bonus payable to a Participant as determined under Section III.A.,
subject to the terms of the Plan.


 


Code — The Internal
Revenue Code of 1986, as from time to time amended including any related
regulations.


 

















 


Committee – The
Compensation Committee of the Board.


 


Company – Marten
Transport, Ltd.


 


Designated Subsidiary — A
subsidiary of the Company that has been designated by the Committee from time
to time, in its sole and absolute discretion, as eligible to participate in the
Plan.


 


Director — Each
director level employee of the Company or a Designated Subsidiary.


 


Eligible Employee – Each
non-driver employee of the Company or a Designated Subsidiary who has completed
at least one year of continuous service as of December 31 of an Award Year
and is employed by the Company or a Designated Subsidiary as of December 31
of an Award Year.


 


Employer — The Company
and any Designated Subsidiary.


 


ERISA — The Employee
Retirement Income Security Act of 1974, as from time to time amended, including
any related regulations.


 


Executive Officer –
Each executive officer of the Company who has been elected an executive
officer, within the meaning of the rules of the Securities and Exchange
Commission, by the Board.


 


Non-Driver Employee –
Each non-driver employee of the Company or a Designated Subsidiary whom is not
an Executive Officer or a Director.


 


Participant — Each Eligible
Employee who is designated as a Participant for an Award Year by the Committee.


 


Performance Objective
– A specified level for the Company’s net income, before any Bonus Award, as
established by the Committee for each Award Year.


 


Plan — The Marten
Transport, Ltd. Performance Incentive Bonus Plan, as evidenced by this written
instrument as may be amended from time to time.


 


Subsidiary — Any
entity, corporate or otherwise, in which the Company, directly or indirectly,
owns or controls a greater than 50% interest.


 


Target Award Percentage –
The Target Award Percentage set forth on Exhibit A for the percentage of
the Performance Objective achieved by the Company.


 


II.                                     PARTICIPATION


 


A.                                   Participants. Participants will be determined annually by
the Committee from among the Company’s Eligible Employees. Designation as a
Participant will


 


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apply only for the
Award Year for which the designation is made and may include a partial
year.


 


B.                                     Termination of Employment. In order to be entitled to
receive a payment for Bonus Award for an Award Year, a Participant must be
actively and continuously employed for at least one year through December 31
of the Award Year for which the Bonus Award is paid; however, the Committee may,
in its sole and absolute discretion, pay a Bonus Award to a Participant who has
terminated employment prior to December 31 of the relevant Award Year.


 


III.                                 COMPUTATION
AND PAYMENT OF BONUS AWARDS


 


A.                                   Formula Bonus.


 


1.                                       Executive Officers. Each Executive Officer will be eligible to
receive a Bonus Award equal to 50% of his or her Base Salary, multiplied by the
Target Award Percentage for the percentage of the Performance Objective
achieved by the Company for an Award Year, as set forth on Exhibit A.


 


2.                                       Directors. Each Director will be eligible to receive a Bonus
Award equal to 15% of his or her Base Salary, multiplied by the Target Award
Percentage for the percentage of the Performance Objective achieved by the
Company for an Award Year, as set forth on Exhibit A.


 


3.                                       Non-Driver Employees. Each Non-Driver Employee will be
eligible to receive a Bonus Award equal to 5% of his or her Base Salary,
multiplied by the Target Award Percentage for the percentage of the Performance
Objective achieved by the Company for an Award Year, as set forth on Exhibit A.


 


4.                                       Minimum Performance Objective. No Bonus Award will be earned
under this Section III.A. unless the Company’s net income for an Award
Year is at least 96% of the Performance Objective.


 


5.                                       Pro Ration. If the percentage of the Performance Objective
achieved by the Company for an Award Year is between two whole percentages, the
Bonus Award will be prorated on a straight-line basis between such whole
percentages.


 


B.                                     Committee’s Discretion. The Committee may, in its sole and absolute
discretion, at any time during or after an Award Year adjust the Company’s net
income for the purpose of determining Bonus Awards for an Award Year to account
for extraordinary items affecting net income.


 


C.                                     Cash Payment. Payment of a Bonus Award will be made in cash
as soon as practicable following the end of the Award Year, without interest,
but in any event by the March 15 following the end of the Award Year.


 


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D.                                    Withholding Taxes. Notwithstanding any of the foregoing
provisions, the Employer shall withhold from any payment to be made hereunder
such amounts as it reasonably determines it may be required to withhold
under any applicable federal, state or other law, and transmit such withheld
amounts to the appropriate authorities.


 


E.                                      Payment in Event of Incapacity. If any individual entitled
to receive any payment under the Plan is, in the judgment of the Committee,
physically, mentally or legally incapable of receiving or acknowledging receipt
of the payment, and no legal representative has been appointed for the
individual, the Committee may (but is not required to) cause the payment
to be made to any one or more of the following as may be chosen by the
Committee; the institution maintaining the individual; a custodian for the
individual under the Uniform Transfers to Minors Act of any state; or the
individual’s spouse, child, parent, or other relative by blood or marriage. The
Committee is not required to see to the proper application of any such payment,
and the payment completely discharges all claims under the Plan against the
Company, and the Plan to the extent of the payment.


 


F.                                      Payment in the Event of Death. Distribution to a deceased
Participant will be made to the Participant’s heirs determined pursuant to the
applicable laws of inheritance or descent.


 


IV.                                 PLAN
ADMINISTRATION


 


A.                                   Plan Administration. The Committee or its delegate has the
authority and responsibility to manage and control the general administration
of the Plan. This Plan is not intended to modify or limit the powers, duties or
responsibilities of the Committee as set forth under the Charter for the
Committee as adopted by the Board from time to time. Determinations, decisions
and actions of the Committee, in connection with the construction,
interpretation, administration, or application of the Plan will be final,
conclusive, and binding upon any Participant and any person claiming under or
through the Participant. No employee of an Employer, any member of the Board,
any delegate of the Board, or any member of the Committee will be liable for
any determination, decision, or action made in good faith with respect to the
Plan or any Bonus Award made under the Plan.


 


B.                                     Compensation Committee. The Compensation Committee has the
sole authority and responsibility to establish the amount of any Bonus Award payable
to any Participant.


 


V.                                     AMENDMENT
OR TERMINATION


 


The Plan may at any
time be amended, modified, or terminated, as the Committee in its sole and
absolute discretion determines. Such amendment, modification, or termination of
the Plan will not require the consent, ratification, or approval of any party,
including any Participant.


 


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VI.                                 MISCELLANEOUS


 


A.                                   Non-Assignability. A Participant’s rights and interests in
and to payment of any Bonus Award under the Plan may not be assigned,
transferred, encumbered or pledged other than by will or the laws of descent
and distribution; and are not subject to attachment, garnishment, execution or
other creditor’s processes.


 


B.                                     No Contract of Employment. Neither the Plan, nor any Bonus Award,
constitutes a contract of employment, and participation in the Plan will not
give any employee the right to be retained in the service of the Company or any
Subsidiary or continue in any position or at any level of compensation.


 


C.                                     Controlling Law. This Plan and all determinations made and
actions taken pursuant hereto to the extent not preempted by federal laws, will
be governed and construed by the internal laws of the State of Wisconsin,
except its laws with respect to choice of law.


 


D.                                    Unfunded, Unsecured Obligation. A Participant’s only
interest under the Plan shall be the right to receive either a cash payment for
a Bonus Award pursuant to the terms of the Bonus Award and the Plan. No portion
of the amount payable to a Participant under this Plan shall be held by the
Company or any Subsidiary in trust or escrow or any other form of asset
segregation. To the extent that a Participant acquires a right to receive a
cash payment under the Plan, such right shall be no greater than the right of
any unsecured, general creditor of the Company, and no trust in favor of any
Participant will be implied.


 


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EXHIBIT A


 




	
  Percentage of

  Performance

  Objective

  Achieved

  	
   

  	
  Target

  Award

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  96

  	
  %

  	
  5

  	
  %

  
	
  97

  	
  %

  	
  10

  	
  %

  
	
  98

  	
  %

  	
  15

  	
  %

  
	
  99

  	
  %

  	
  20

  	
  %

  
	
  100

  	
  %

  	
  25

  	
  %

  
	
  101

  	
  %

  	
  30

  	
  %

  
	
  102

  	
  %

  	
  35

  	
  %

  
	
  103

  	
  %

  	
  40

  	
  %

  
	
  104

  	
  %

  	
  45

  	
  %

  
	
  105

  	
  %

  	
  50

  	
  %

  
	
  106

  	
  %

  	
  60

  	
  %

  
	
  107

  	
  %

  	
  70

  	
  %

  
	
  108

  	
  %

  	
  80

  	
  %

  
	
  109

  	
  %

  	
  90

  	
  %

  
	
  110

  	
  %

  	
  100

  	
  %

  
	
  111

  	
  %

  	
  105

  	
  %

  
	
  112

  	
  %

  	
  110

  	
  %

  
	
  113

  	
  %

  	
  115

  	
  %

  
	
  114

  	
  %

  	
  120

  	
  %

  
	
  115

  	
  %

  	
  125

  	
  %

  
	
  116

  	
  %

  	
  130

  	
  %

  
	
  117

  	
  %

  	
  135

  	
  %

  
	
  118

  	
  %

  	
  140

  	
  %

  
	
  119

  	
  %

  	
  145

  	
  %

  
	
  120

  	
  %

  	
  150

  	
  %

  






 


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