Form of Executive Incentive Compensation Plan



 Exhibit 10(e) 
  
 

 
  
  
 Executive Incentive Compensation Plan 
  







 ABX Air, Inc. 
 Executive Incentive Compensation Plan 
 Effective January 1, 2004 – December 31, 2006

  

	1)	Purpose 

 The purpose of this Plan is
to achieve Corporate goals by providing incentive compensation to eligible key executives who, through industry, ability, and exceptional service, contribute materially to the success of ABX Air. 
  

	2)	Definitions 

 When used in the Plan,
the following words and phrases shall have the following meaning: 

	 	a)	Attainment – The actual performance results for a Performance Measure. 


	 	b)	Beneficiary – The beneficiary or beneficiaries designated to receive the amount, if any, payable under the Plan upon the death of the Participant. 


	 	c)	Board – The Board of Directors of ABX Air, Inc. 


	 	d)	Compensation Committee – The Compensation Committee of the Board. 


	 	e)	Maximum – The point that represents the maximum payout level for a particular Performance Measure. 


	 	f)	Minimum – The point that represents the minimum payout level for a particular Performance Measure. 


	 	g)	Participant – Any employee eligible to receive awards under section 4. 


	 	h)	Percent of Incremental Markup Achieved – The actual total percent of incremental markup paid to ABX Air for meeting service and cost goals under the ACMI contract and the Hub
Services contract. This percentage is referenced in the Bonus Percentage Lookup Tables to determine the percent of salary awarded in bonus. 


	 	i)	Performance Measure – A specific objective measure to assess success in achieving established goals. Permitted Performance Measures are listed in section 5.



	 	j)	Plan – The 2004 – 2006 Executive Incentive Compensation Plan (EICP). 


	 	k)	Plan Year – Each calendar year for which Performance Measures and Targets are established for the Company. 


	 	l)	Retirement – When an employee leaves active service and qualifies under the Company’s regular or early retirement programs. 


	 	m)	Target – The point at which performance equals 100% of stated objective. 


	 	n)	Threshold – The point below Target at which incentive payout for each Performance Measure begins. 

  

	3)	Administration 


	 	a)	The Compensation Committee will have the power to interpret the Plan and to make all determinations necessary or desirable for its administration. 


	 	b)	The decision of the Compensation Committee on any question concerning the interpretation or administration of the Plan will be final and conclusive. Nothing in the Plan will be
deemed to give any officer or employee, or legal representatives or assigns, any right to participate in the Plan except to such extent as the Compensation Committee may determine pursuant to the provisions of the Plan. 

  

	4)	Eligibility 


	 	a)	Positions eligible for the Plan are: 

 Chief Executive Officer 
 Chief Financial Officer 
 Senior Vice Presidents 
 Vice Presidents 
 Except as provided below, Participants for a Plan Year must be employed for
the entire Plan Year. 
  

	 	b)	With approval of the Compensation Committee, prior to June 30th of each Plan Year, additional employees may be included in the Plan, with any award pro-rated as shall be determined
by the Compensation Committee. 









	 	c)	Participants who retire in good standing during the year will be eligible for a pro-rated award for the year in which they retire, provided that they are on the active payroll on
June 30th or later of the Plan Year. 


	 	d)	Participants who take a leave of absence will have their awards calculated based on actual ABX Air salary earnings in calculating awards. Participants who are on a leave of absence
for more than 90 days and who continue to receive full or partial salary continuance will have their awards adjusted. Any salary paid while on leave of absence period over 90 days will not be included in the base salary used to calculate awards.


  

	5)	Performance Measures 

 Unless
otherwise determined by the Committee, bonuses will be based on one Performance Measure – Percent of Incremental Markup Achieved. In addition to, or in lieu of, the preceding Performance Measure, the Committee may select one or more of the
following Performance Measures: Net Profit, Revenue Growth, earnings per share, shipment growth, increase in stock price, return on assets, or return on equity. If any additional Performance Measures are selected, The Compensation Committee will set
an annual Target for each of them within 90 days after the beginning of each Plan year, and such Targets may not be changed thereafter. The Targets may be ratified by the Board. Unless within 90 days after the beginning of each Plan Year the
Committee selects other Performance Measures from the list above, bonuses will be allocated based 100% on Percent of Incremental Markup Achieved. 
  

	6)	Qualifiers on Performance Measures 


	 	a)	The bonus percentage is applied to the Participant’s base salary paid in the Plan (calendar)Year. 


	 	b)	No bonus will be paid unless the Company achieves an Incremental Markup. 


	 	c)	To receive any award under the Plan, a Participant’s individual performance must be evaluated as at least competent by the Compensation Committee. 

  

	7)	Bonus Amounts 

 Actual bonuses will be
determined by multiplying the following percentages, or a pro-rated portion thereof, by the Participant’s annual salary. 
  

					
	

	 Position
	 	Minimum	 	Maximum
	

	 Chief Executive Officer
	 	5%	 	130%
	

	 CFO, Senior Vice President
	 	4%	 	100%
	

	 Vice President
	 	4%	 	80%
	


  

	8)	Example 

 An example incentive
calculation for the CEO level is shown below. 
  

	9)	Form of Payment 

 Awards shall be paid
entirely in cash. Payments will be made as soon as practicable after audited performance results are known and approved by the Compensation Committee, which should be on or about March 1. Award checks are prepared by the Payroll Department and the
amounts are subject to tax withholding and Capital Accumulation Plan (CAP) deductions. 
 If a Participant dies before the end of the Plan
Year, an amount equal to a pro-rated portion thereof as of the date of death shall be paid in one lump cash sum to the Participant’s Beneficiary. 
  

	10)	Limitation on Allocation 

 Notwithstanding any other provision of the Plan, in no circumstances will the total amount allocated as an award to any individual Participant for any plan year exceed $1,000,000.00, Nor will the total amount allocated collectively to all
of the Participants exceed 25% of the total incremental markup. 
  

	11)	Designation of Beneficiaries 

 Each
Participant shall file with the Company a written designation of one or more persons as the Beneficiary who shall be entitled to receive the amount, if any, payable under the Plan upon the Participant’s death. A Participant may, from time to
time, revoke or change his Beneficiary designation without the consent of any prior Beneficiary by filing a new designation. The last such 







 designation received shall be controlling, provided, however, that no designation, or change, or
revocation thereof, shall be effective unless received by the Company prior to the Participant’s death, and in no event shall it be effective as of a date prior to such receipt. 
  

	12)	Absence of Valid Designation 

 If no
such Beneficiary designation is in effect at the time of the Participant’s death, or if no designated Beneficiary survives the Participant, or if such designation conflicts with the law, The Participant shall be deemed to have designated the
Participant’s estate as the Participant’s Beneficiary ant the Participant’s estate shall receive the payment of the amount, if any, under the Plan, upon the Participant’s death. If the Compensation Committee is in doubt as to the
right of any person to receive such amount, the Compensation Committee may direct retention of such amount, without liability for any interest thereon, until the rights thereto are determined or the Compensation Committee may pay such amount to any
court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Plan and of ABX Air therefore. 
  

	13)	No Liability of Compensation Committee, Board Members, or Officers 

 No members of the Compensation Committee, Board, or Corporate officers shall be personally liable by reason of any contract or other instrument executed by them or on their behalf nor for any mistake or judgement made
in good faith, and ABX Air shall indemnify and hold harmless each member of the Board and each other officer, employee or director of ABX Air to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Compensation Committee) arising out of any act or omission to act in connection with the Plan
unless arising out of such person’s own fraud or bad faith. 
  

	14)	Right to Amend, Suspend, or Terminate Plan 

 The Board reserves the right at any time to amend, suspend, or terminate the Plan in whole or in part and for any reason and without the consent of any Participant or Beneficiary; provided that no such amendment shall adversely affect
rights to receive any amount to which Participants or Beneficiaries have become entitled prior to such amendment. Unless otherwise provided herein, any amendment, modification, suspension, or termination of any provisions of the Plan may be made
retroactively. 
  

	15)	No Rights to Continue Employment or Bonus 

 Nothing contained in the Plan shall give any employee the right to be retained in the employment of ABX Air or affect the right of ABX Air to dismiss any employee. The adoption of the Plan shall not constitute a contract between ABX Air and
any employee. No Participant shall receive any right to be granted an award hereunder nor shall any such award be considered as compensation under any employee benefit plan of ABX Air except as otherwise determined by ABX Air. 
  

	16)	No Right, Title, or Interest in Assets 

 The Participants hall have no right, title, or interest whatsoever in or to any investments which ABX Air may make to aid in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a fiduciary relationship between ABX Air and any Participant or any other person. To the extent that any person acquires a right to receive payments from ABX Air under this Plan, such right shall be
no greater than the right of an unsecured general creditor of ABX Air. 
  

	17)	Unfunded Plan: Governing Law 

 The
Plan is intended to constitute an incentive compensation arrangement for a select group of management or highly compensated personnel and all rights thereunder shall be governed by and construed in accordance with the laws of the State of Ohio.








 EICP Calculation Example 
  

 
 Assumed Facts: 

	 	1.	Title: CEO 


	 	2.	Salary: $400,000 


	 	3.	Bonus Opportunity as a Percent of Salary: 

  

			
	

	 Minimum
	 	Maximum
	

	 5%
	 	130%
	


  

	 	4.	Performance Measure: Percent of Incremental Markup Achieved 


	 	5.	Attainment: .67% Incremental Markup 


	 	6.	Refer to Bonus Percent Lookup Table: 

  

			
	

	 Percent of Incremental Markup Achieved
	 	Percent of Salary
	

	 .60%
	 	58%
	

	 .65%
	 	61%
	

	 .70%
	 	64%
	


  

	 	7.	Calculation of Bonus: 


													
	     Bonus Percent
	  	X	  	 	  	Annual Salary	  	=	  	 	  	Total Bonus
	 61%
	  	X	  	 	  	$400,000	  	=	  	 	  	$244,000