2007 Short-Term Incentive Plan



 Exhibit 10.6 
  

					
		 	 Subject:
 2007 Short-Term Incentive
Plan
	  	Page 1 of 7
		 	 Approved By:
 Human Resources
Committee
	  	
	 


	 	  
 2007 Short-Term Incentive Plan
  
 Applicability
 Eligible Employees of Textainer.
  
 Effective Date
                                        
                                        
                                    Supersedes
 1 January 2007
                                        
                                        
                                    1 January 2006
	  	
		 	  
 Purpose
  
 To set forth the principles, policies, and procedures that will guide the administration of the
Textainer short-term incentive plan (the “STIP”).
  
 Philosophy of the
STIP
  
 The philosophy underlying the STIP is to recognize and encourage the direct,
immediate relationship between: (i) employee incentive awards (“Incentive Awards”), (ii) net operating income (“NOI”) generated for the owners of managed containers, and (iii) Textainer’s Net After-tax Income
measured as a return on average shareholder equity (“Return on Equity” or “ROE”).
  
 A key objective of the STIP is to motivate Textainer Employees to increase NOI, which is the primary driver of profitability for the container owners and Textainer. Improvement in NOI benefits Textainer because of
Textainer’s direct interest in the performance of the containers owned by TL, as well as through the performance-based management fees earned from other container owners. Other objectives include the encouragement of long-term employment and
the control of overhead expenses both of which benefit both container owners (e.g., Textainer public limited partnerships) and Textainer.
  
 Policy
  
 STIP Year
  
 A STIP for calendar year 2007 (the “STIP Year”) for
Textainer Employees has been approved. The STIP is effective as of the 1st day of January of the STIP Year.
  
 Eligibility for Participation
  
 A All
Employees of Textainer who are not in a temporary or introductory status (including Employees of TEM’s dedicated agencies) are considered Eligible Employees.
  
 B Because one of the objectives of the STIP is to encourage long-term employment, in order to receive an Actual Incentive Award Eligible Employees must remain
employed at
	  	











					
		 	 Subject:
 2007 Short-Term Incentive
Plan
	  	Page 2 of 7
		 	 Approved By:
 Human Resources
Committee
	  	
			
	 


	 	 Textainer from the date they become Eligible Employees until the date that any payments are made under the STIP and, subject to section F below, must
be Employees of Textainer on this date (see Summary of Administration below). The Human Resources Committee may, at its sole discretion and on a case-by-case basis, consider exceptions when otherwise Eligible Employees during the STIP Year are not
employed by Textainer on the date that a payment is made under the STIP.
  
 C
Eligible Employees who have fulfilled the requirements of sections A and B above are considered participants (“Participants”) in the STIP.
	  	
			
		 	 D Eligible Employees who become Participants during the STIP Year will receive a prorated Incentive Award based on the percentage of the STIP
Year over which the Eligible Employee was employed by Textainer. Participants who move from one level of Incentive Award to another during the STIP Year will receive a prorated Incentive Award based on the percentage of time spent at each level
during the STIP Year.
  
 E Part-time Employees will receive a prorated percentage
of the Incentive Award based on hours worked during the STIP year compared to a standard Textainer Full-time schedule.
  
 F An Employee on a leave of absence which has been properly authorized in accordance with current company policy is eligible to receive a prorated percentage of the Incentive Award, based on his or her
completed days of service during the STIP Year.
  
 Target Incentive
Award
  
 An Incentive Award target (“Target Incentive Award”), based on a
ROE of 14.0%, has been assigned to each respective job classification. Each Eligible Employee will be notified of his/her Target Incentive Award at the beginning of the STIP Year or on the first day he/she becomes an Eligible Employee.
  
 Actual Incentive Award Calculation
  
 The Incentive Award to be paid to each Participant (“Actual Incentive Award”) is based on
Textainer’s Return on Equity. Textainer will calculate the Actual Incentive Award for each Participant based on the ROE for the STIP Year as calculated from the annual audited financial statements of Textainer Group Holdings Limited and
subsidiaries. If Textainer’s ROE for the STIP Year is exactly 14%, each Participant’s Actual Incentive Award will equal 100% of his/her Target Incentive Award. As shown on Exhibit A, ROE above or below 14% will result in an Actual
Incentive Award higher or lower than 100% of the Target Incentive Award.
	  	











					
		 	 Subject:
 2007 Short-Term Incentive
Plan
	  	Page 3 of 7
		 	 Approved By:
 Human Resources
Committee
	  	
			
	 


	 	 Summary of Administration
  
 A Any payments of Actual Incentive Awards will be made to Participants on the fifth working day of April following the end of the STIP Year.
  
 B Although care has been taken to develop an Incentive Award formula that minimizes the need
for change during the STIP Year, it is possible that unforeseen changes in Textainer’s business or capital structure will necessitate such change, including termination of the STIP, at any time during the STIP Year. Such change will be
effective immediately upon notice to the Eligible Employees. Any such changes are the responsibility and at the sole discretion of Textainer’s Board of Directors and shall be conclusive and binding upon all Eligible Employees.
	  	
			
		 	 C No ceiling shall be established on the size of the Incentive Awards, except as described herein. However, no Incentive Award will be paid if
Textainer’s ROE is less than or equal to 9%.
  
 D The existence of the STIP
and the eligibility of any Textainer Employee to participate therein is entirely at the Board of Directors’ discretion. A Textainer Employee who is not a Participant shall have no right, claim or entitlement to any payments under the
STIP.
  
 E It is intended that interim unaudited information regarding
Textainer’s performance will be made available at least quarterly to all Eligible Employees.
  
 F The STIP will be in effect only for the STIP Year. The Board of Directors, in its sole discretion, shall determine on an annual basis whether or not a bonus plan shall be approved for any subsequent fiscal
year and, if so, what form such plan will take.
  
 G Nothing in this STIP
supersedes, modifies or affects (a) any employment contract or any other agreement with an Employee relating to employment, or (b) any policy, procedure or practice of Textainer in effect now or as adopted from time to time in the future.

	  	











					
		 	 Subject:
 2007 Short-Term Incentive
Plan
	  	Page 4 of 7
		 	 Approved By:
 Human Resources
Committee
	  	
			
	 


	 	 Exhibit A
  
 Textainer’s Net Income as a percentage of Average Shareholder Equity (“Return on Equity” or “ROE”) is targeted at 14.0%, and the target Incentive Award amount for each Participant has been set
assuming this percentage is achieved. However, should Textainer achieve more or less than this percentage, the Incentive Award amounts for each Participant will vary according to the following schedule.
	  	

 TEXTAINER 2007 SHORT-TERM INCENTIVE PLAN 
  

											
	 TGH After-tax
 Profit as a
 Percentage of
Avg.
Equity (ROE)
	  	 2007 STIP
 Payments
 (% of Base)
	  	 TGH After-tax
 Profit as a
 Percentage of Avg.
Equity (ROE)
	  	 2007 STIP
 Payments
 (% of Base)
	  	 TGH After-tax
 Profit as a
Percentage of Avg.
Equity(ROE)
	  	 2007 STIP
 Payments
 (% of Base)

	9.0%	  	0.0%	  	12.5%	  	70.0%	  	16.0%	  	116.3%
	9.1%	  	2.0%	  	12.6%	  	72.0%	  	16.1%	  	117.2%
	9.2%	  	4.0%	  	12.7%	  	74.0%	  	16.2%	  	118.1%
	9.3%	  	6.0%	  	12.8%	  	76.0%	  	16.3%	  	119.1%
	9.4%	  	8.0%	  	12.9%	  	78.0%	  	16.4%	  	120.0%
	9.5%	  	10.0%	  	13.0%	  	80.0%	  	16.5%	  	120.9%
	9.6%	  	12.0%	  	13.1%	  	82.0%	  	16.6%	  	121.8%
	9.7%	  	14.0%	  	13.2%	  	84.0%	  	16.7%	  	122.7%
	9.8%	  	16.0%	  	13.3%	  	86.0%	  	16.8%	  	123.7%
	9.9%	  	18.0%	  	13.4%	  	88.0%	  	16.9%	  	124.7%
	10.0%	  	20.0%	  	13.5%	  	90.0%	  	17.0%	  	125.7%
	10.1%	  	22.0%	  	13.6%	  	92.0%	  	17.1%	  	126.7%
	10.2%	  	24.0%	  	13.7%	  	94.0%	  	17.2%	  	127.7%
	10.3%	  	26.0%	  	13.8%	  	96.0%	  	17.3%	  	128.7%
	10.4%	  	28.0%	  	13.9%	  	98.0%	  	17.4%	  	129.7%
	10.5%	  	30.0%	  	14.0%	  	100.0%	  	17.5%	  	130.7%
	10.6%	  	32.0%	  	14.1%	  	100.8%	  	17.6%	  	131.7%
	10.7%	  	34.0%	  	14.2%	  	101.5%	  	17.7%	  	132.8%
	10.8%	  	36.0%	  	14.3%	  	102.3%	  	17.8%	  	133.8%
	10.9%	  	38.0%	  	14.4%	  	103.1%	  	17.9%	  	134.9%
	11.0%	  	40.0%	  	14.5%	  	103.8%	  	18.0%	  	136.0%
	11.1%	  	42.0%	  	14.6%	  	104.6%	  	18.1%	  	137.1%
	11.2%	  	44.0%	  	14.7%	  	105.4%	  	18.2%	  	138.1%
	11.3%	  	46.0%	  	14.8%	  	106.1%	  	18.3%	  	139.2%
	11.4%	  	48.0%	  	14.9%	  	106.9%	  	18.4%	  	140.3%
	11.5%	  	50.0%	  	15.0%	  	107.7%	  	18.5%	  	141.3%
	11.6%	  	52.0%	  	15.1%	  	108.6%	  	18.6%	  	142.5%
	11.7%	  	54.0%	  	15.2%	  	109.4%	  	18.7%	  	143.6%
	11.8%	  	56.0%	  	15.3%	  	110.3%	  	18.8%	  	144.8%
	11.9%	  	58.0%	  	15.4%	  	111.1%	  	18.9%	  	145.9%
	12.0%	  	60.0%	  	15.5%	  	111.9%	  	19.0%	  	147.1%
	12.1%	  	62.0%	  	15.6%	  	112.8%	  	19.1%	  	148.2%
	12.2%	  	64.0%	  	15.7%	  	113.6%	  	19.2%	  	149.4%
	12.3%	  	66.0%	  	15.8%	  	114.5%	  	19.3%	  	150.5%
	12.4%	  	68.0%	  	15.9%	  	115.4%	  	19.4%	  	151.7%











					
		 	 Subject:
 2007 Short-Term Incentive
Plan
	  	Page 5 of 7
		 	 Approved By:
 Human Resources
Committee
	  	

  

													
	 


	 	 TGH After-tax
 Profit as a
 Percentage of Avg.
Equity (ROE)
	  	 2007 STIP
 Payments
 (% of Base)
	  	 TGH After-tax
 Profit as a
 Percentage of Avg.
Equity (ROE)
	  	 2007 STIP
 Payments
 (% of Base)
	  	 TGH After-tax
 Profit as a
 Percentage of Avg.
Equity (ROE)
	  	 2007 STIP
 Payments
 (% of Base)

	 	19.5%	  	152.9%	  	24.3%	  	220.4%	  	29.0%	  	307.4%
	 	19.6%	  	154.1%	  	24.4%	  	222.0%	  	29.1%	  	309.5%
	 	19.7%	  	155.4%	  	24.5%	  	223.6%	  	29.2%	  	311.6%
	 	19.8%	  	156.6%	  	24.6%	  	225.3%	  	29.3%	  	313.6%
	 	19.9%	  	157.8%	  	24.7%	  	227.0%	  	29.4%	  	315.8%
	 	20.0%	  	159.0%	  	24.8%	  	228.6%	  	29.5%	  	317.9%
	 	20.1%	  	160.3%	  	24.9%	  	230.3%	  	29.6%	  	320.1%
	 	20.2%	  	161.5%	  	25.0%	  	232.0%	  	29.7%	  	322.2%
	 	20.3%	  	162.7%	  	25.1%	  	233.7%	  	29.8%	  	324.3%
	 	20.4%	  	164.0%	  	25.2%	  	235.4%	  	29.9%	  	326.5%
	 	20.5%	  	165.3%	  	25.3%	  	237.1%	  	30.0%	  	328.6%
	 	20.6%	  	166.6%	  	25.4%	  	238.8%	  	30.1%	  	330.8%
	 	20.7%	  	167.9%	  	25.5%	  	240.6%	  	30.2%	  	333.0%
	 	20.8%	  	169.2%	  	25.6%	  	242.3%	  	30.3%	  	335.2%
	 	20.9%	  	170.5%	  	25.7%	  	244.1%	  	30.4%	  	337.4%
	 	21.0%	  	171.8%	  	25.8%	  	245.9%	  	30.5%	  	339.7%
	 	21.1%	  	173.1%	  	25.9%	  	247.6%	  	30.6%	  	341.9%
	 	21.2%	  	174.4%	  	26.0%	  	249.4%	  	30.7%	  	344.1%
	 	21.3%	  	175.8%	  	26.1%	  	251.1%	  	30.8%	  	346.3%
	 	21.4%	  	177.2%	  	26.2%	  	253.0%	  	30.9%	  	348.5%
	 	21.5%	  	178.6%	  	26.3%	  	254.8%	  	31.0%	  	350.8%
	 	21.6%	  	179.9%	  	26.4%	  	256.7%	  	31.1%	  	353.1%
	 	21.7%	  	181.3%	  	26.5%	  	258.5%	  	31.2%	  	355.4%
	 	21.8%	  	182.7%	  	26.6%	  	260.3%	  	31.3%	  	357.7%
	 	21.9%	  	184.1%	  	26.7%	  	262.2%	  	31.4%	  	360.0%
	 	22.0%	  	185.5%	  	26.8%	  	264.0%	  	31.5%	  	362.3%
	 	22.1%	  	186.8%	  	26.9%	  	265.8%	  	31.6%	  	364.6%
	 	22.2%	  	188.3%	  	27.0%	  	267.8%	  	31.7%	  	366.9%
	 	22.3%	  	189.7%	  	27.1%	  	269.7%	  	31.8%	  	369.3%
	 	22.4%	  	191.2%	  	27.2%	  	271.6%	  	31.9%	  	371.7%
	 	22.5%	  	192.6%	  	27.3%	  	273.5%	  	32.0%	  	374.0%
	 	22.6%	  	194.1%	  	27.4%	  	275.4%	  	32.1%	  	376.4%
	 	22.7%	  	195.6%	  	27.5%	  	277.3%	  	32.2%	  	378.8%
	 	22.8%	  	197.0%	  	27.6%	  	279.2%	  	32.3%	  	381.2%
	 	22.9%	  	198.5%	  	27.7%	  	281.2%	  	32.4%	  	383.5%
	 	23.0%	  	200.0%	  	27.8%	  	283.2%	  	32.5%	  	385.9%
	 	23.1%	  	201.5%	  	27.9%	  	285.1%	  	32.6%	  	388.4%
	 	23.2%	  	203.1%	  	28.0%	  	287.1%	  	32.7%	  	390.8%
	 	23.3%	  	204.6%	  	28.1%	  	289.1%	  	32.8%	  	393.3%
	 	23.4%	  	206.1%	  	28.2%	  	291.1%	  	32.9%	  	395.7%
	 	23.5%	  	207.7%	  	28.3%	  	293.1%	  	33.0%	  	398.2%
	 	23.6%	  	209.2%	  	28.4%	  	295.1%	  	33.1%	  	400.6%
	 	23.7%	  	210.7%	  	28.5%	  	297.1%	  	33.2%	  	403.1%
	 	23.8%	  	212.3%	  	28.6%	  	299.2%	  		  	
	 	23.9%	  	213.9%	  	28.7%	  	301.2%	  		  	
	 	24.0%	  	215.5%	  	28.8%	  	303.3%	  		  	
	 	24.1%	  	217.2%	  	28.9%	  	305.4%	  		  	
	 	24.2%	  	218.8%	  		  		  		  	









					
		 	 Subject:
 2007 Short-Term Incentive
Plan
	  	Page 6 of 7
		 	 Approved By:
 Human Resources
Committee
	  	

  

					
	

	 	 TGH After-tax
 Profit as a
 Percentage of
 Avg. Equity (ROE)
	  	 2007 STIP
 Payments
 (% of Base)

	 	33.3%	  	405.5%
	 	33.4%	  	408.0%
	 	33.5%	  	410.6%
	 	33.6%	  	413.1%
	 	33.7%	  	415.6%
	 	33.8%	  	418.1%
	 	33.9%	  	420.7%
	 	34.0%	  	423.2%
	 	34.1%	  	425.7%
	 	34.2%	  	428.3%
	 	34.3%	  	430.9%
	 	34.4%	  	433.5%
	 	34.5%	  	436.1%
	 	34.6%	  	438.7%
	 	34.7%	  	441.3%
	 	34.8%	  	444.0%
	 	34.9%	  	446.6%
	 	35.0%	  	449.2%

  








					
		 	 Subject:
 2007 Short-Term Incentive
Plan
	  	Page 7 of 7
		 	 Approved By:
 Human Resources
Committee
	  	

 Exhibit B 
  


							
	

	 	 Net After-tax Income (a)
	  	$	 34,822	 
	 		  	 	 	 
	 	 Average Equity (b)
	  	$	248,730	 
	 	 Net Income % Average Equity (a)/(b)
	  	 	14.0	%
	 	 Actual Incentive Award (per Exhibit A)
	  	 	100.0	%