EXHIBIT 10.2


 


MARTEN TRANSPORT, LTD.


 


EXECUTIVE OFFICER


 


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 executive officers possessing
outstanding ability, motivating such executives by means of performance related
incentives, and providing incentive compensation opportunities which are
competitive with those of similar corporations. The Marten Transport, Ltd.
Executive Officer 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.


 


Award Year Net Income – The Company’s net income, determined in accordance with generally
accepted accounting principles, prior to accounting for the aggregate Bonus
Award and related tax effect for the Award Year.


 


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.


 


Eligible Employee – Each
Executive Officer 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.


 


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


 


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


 


Prior Year Net Income
– The Company’s net income, as reported in its audited financial statements,
for the Prior Year.


 


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


 


II.                                     PARTICIPATION


 


A.                                   Participants. Participants will be determined annually by
the Committee from among the Company’s Eligible Employees. Designation as a
Participant will apply only for the Award Year for which the designation is
made and may include a partial year.


 


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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.                                       Participants. Subject to Section III.A.2., each
Participant will be eligible to earn a Bonus Award if the Award Year Net Income
is 110% or more of the Prior Year Net Income. The Bonus Award for each
Participant will be an amount equal to (a) the percentage increase in the
Award Year Net Income over the Prior Year Net Income, multiplied by (b) his
or her Base Salary; provided, however, that Award Year Net Income (after
accounting for the aggregate Bonus Award) cannot be less than 110% the Prior
Year Net Income, in which case the aggregate Bonus Award will be reduced so
that the Award Year Net Income (after accounting for the aggregate Bonus Award)
is not less than 110% of the Prior Year Net Income; and each Participant’s
Bonus Award would then be reduced on a pro rata basis to reflect such
limitation.


 


2.                                       Minimum Performance Threshold. No Bonus Award will be earned
under Section III.A.1. unless:  (a) the
Award Year Net Income (after accounting for the aggregate Bonus Award) is at
least 110% of the Prior Year Net Income; and (b) the Company’s return on
equity for the Award Year (after accounting for the aggregate Bonus Award) is
at least 15%.


 


B.                                     Committee’s Discretion. The Committee may, in its sole and
absolute discretion, adjust Award Year Net Income and Prior Year Net Income at
any time during or after an Award Year 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.


 


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


 


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(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.


 


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.


 


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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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