Document:

Document

  Exhibit 10.1

DENALI THERAPEUTICS INC.
OUTSIDE DIRECTOR COMPENSATION POLICY
Initially adopted and approved November 10, 2017; most recently amended and restated April 16, 2021 (the “Restatement Date”)
Denali Therapeutics Inc. (the “Company”) believes that granting equity and cash compensation to members of its Board of Directors (the “Board,” and members of the Board, the “Directors”) represents an effective tool to attract, retain, and reward Directors who are not employees of the Company (the “Outside Directors”).  This Outside Director Compensation Policy as amended and restated (the “Policy”)  formalizes the Company’s policy regarding cash compensation and grants of equity to its Outside Directors.  Unless otherwise defined in this Policy, any capitalized terms used in this Policy will have the meaning given such term in the Company’s 2017 Equity Incentive Plan, as amended from time to time (the “Plan”), or if the Plan is no longer in use at the time of an equity award, the meaning given such term or any similar term in the equity plan then in place under which such equity award is granted.  Each Outside Director will be solely responsible for any tax obligations incurred by such Outside Director as a result of the equity and cash payments such Outside Director receives under this Policy.
This amended and restated Policy will be effective as of the Restatement Date.
1.CASH COMPENSATION
Annual Cash Retainer
Each Outside Director will be paid an annual cash retainer of $40,000.  There are no per-meeting attendance fees for attending Board meetings or meetings of any committee of the Board.  
Non-Executive Chair, Committee Chair and Committee Member Annual Cash Retainer
Effective beginning for calendar year 2021, each Outside Director who serves as the non-executive Chair of the Board, chair of a committee of the Board, or member of a committee of the Board will be eligible to earn additional annual cash retainers as follows: 
									
	Non-Executive Chair of the Board		$35,000
	Chair of Audit Committee:		$20,000
	Member of Audit Committee:                        (excluding Committee Chair)		$10,000
	Chair of Compensation Committee:		$15,000
	Member of Compensation Committee:           (excluding Committee Chair)		$7,500
	Chair of Nominating and Governance Committee:		$10,000
	Member of Nominating and Governance Committee:                                                         (excluding Committee Chair)		$5,000
	Chair of Science and Technology Committee:		$15,000
	Member of Science and Technology Committee:        (excluding Committee Chair)		$7,500

 

Payment 
Each annual cash retainer under this Policy will be paid quarterly in arrears on a prorated basis to each Outside Director who has served in the relevant capacity at any point during the immediately preceding fiscal quarter, and such payment shall be made no later than thirty (30) days following the end of such immediately preceding fiscal quarter. For the avoidance of doubt, cash retainers payable for the fiscal quarter containing the Restatement Date will be paid at the rates in effect on the Restatement Date. For purposes of clarification, an Outside Director who has served as an Outside Director, as non-executive Chair of the Board or as a member of an applicable committee (or chair thereof), as applicable, during only a portion of the relevant Company fiscal quarter will receive a pro-rated payment of the quarterly payment of the applicable annual cash retainer(s), calculated based on the number of days during such fiscal quarter such Outside Director has served in the relevant capacities.
2.EQUITY COMPENSATION
Outside Directors may receive any Awards (except Incentive Stock Options) under the Plan (or the applicable equity plan in place at the time of grant), including discretionary Awards not covered under this Policy.  All grants of Awards to Outside Directors under this Section 2 will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the following provisions and all other provisions of the Plan that are not inconsistent with this Policy:
(a)Initial Awards.  
i.Initial Stock Options. Subject to Section 11 of the Plan, each person who first becomes an Outside Director on or following the Restatement Date automatically will be granted a Nonstatutory Stock Option (the “Initial Option”) covering the number of Shares equal to (x) the Initial Award Base Number multiplied by (y) sixty percent (60%); provided, however, that the number of Shares covered by an Initial Option will be rounded down to the nearest whole Share.  The Initial Option grant will be effective on the date on which such person first becomes an Outside Director on or following the Restatement Date, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy.  Notwithstanding the foregoing, a Director who was an Employee (an “Inside Director”) who ceases to be an Inside Director, but who remains a Director, will not receive an Initial Option. Subject to Section 5 below and Section 14 of the Plan, each Initial Option will vest and become exercisable as to twenty-five percent (25%) of the Shares subject to the Initial Option on the one (1)-year anniversary of the date of grant and as to one-forty-eighth (1/48th) of the Shares subject to the Initial Option on each monthly anniversary of the date of grant thereafter (and if there is no corresponding day, on the last day of the month), in each case, provided that the Outside Director continues to serve as an Outside Director through the applicable vesting date.
ii.Initial Restricted Stock Unit Awards. Subject to Section 11 of the Plan, each person who first becomes an Outside Director on or following the Restatement Date automatically will be granted a Restricted Stock Unit Award (the “Initial RSU”) covering the number of Shares determined by 
1.taking the product of (x) the Initial Award Base Number multiplied by (y) forty percent (40%); and
2.dividing such product by two (2) (representing a conversion to the Initial RSU Share number based on a 2:1 option to RSU ratio);
provided, however, that the number of Shares covered by an Initial RSU will be rounded down to the nearest whole Share.  The Initial RSU will be effective on the date on which such person first becomes an Outside Director on or following the Restatement Date, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy;.  Notwithstanding the foregoing, an Inside Director who ceases to be an Inside Director, but who remains a Director, will not receive an Initial RSU. 
 - 2 -

Subject to Section 5 below and Section 14 of the Plan, each Initial RSU will vest as to twenty-five percent (25%) of the Shares subject to the Initial RSU on each of the one (1)-year, two (2)-year and three (3)-year anniversaries of the date of grant (and if there is no corresponding day, on the last day of the month), and as to twenty-five percent (25%) of the Shares subject to the Initial RSU on the earlier of the four (4)-year anniversary of the grant date (and if there is no corresponding day, on the last day of the month) or the day prior to the Company’s next Annual Meeting occurring after the three (3)-year anniversary of the date of grant, in each case, provided that the Outside Director continues to serve as an Outside Director through the applicable vesting date.
(b)Initial Award Base Number.  For purposes of this Policy, “Initial Award Base Number” means the number of Shares that would be subject to an Option with a Value of $600,000 if such Option was granted under the Plan on the date on which such person first becomes an Outside Director on or following the Restatement Date.
(c)Annual Awards.  
i.Annual Stock Options.  Subject to Section 11 of the Plan and to the following sentence, on the date of each annual meeting of stockholders of the Company (each, an “Annual Meeting”), beginning with the first Annual Meeting following the Restatement Date, each Outside Director automatically will be granted a Nonstatutory Stock Option (an “Annual Option”) covering the number of Shares equal to (x) the Annual Award Base Number multiplied by (y) sixty percent (60%); provided that the number of Shares covered by each Annual Option will be rounded down to the nearest whole Share. Each Annual Option will be effective on the date of the applicable Annual Meeting, if, as of such Annual Meeting date, the applicable Outside Director will have served on the Board as a Director for at least the preceding six (6) months; provided that any Outside Director who is not continuing as a Director following the applicable Annual Meeting will not receive an Annual Option with respect to such Annual Meeting.  Subject to Section 5 below and Section 14 of the Plan, each Annual Option will vest and become exercisable as to one hundred percent (100%) of the Shares subject thereto upon the earlier of the one (1) year anniversary of the grant date or the day prior to the Company’s next Annual Meeting occurring after the grant date, in each case, provided that the Outside Director continues to serve as an Outside Director through the applicable vesting date.
ii.Annual Restricted Stock Unit Awards.  Subject to Section 11 of the Plan and to the following sentence, on the date of each Annual Meeting, beginning with the first Annual Meeting following the Restatement Date, each Outside Director automatically will be granted a Restricted Stock Unit Award (an “Annual RSU” and, together with the Annual Options, the “Annual Awards”) covering the number of Shares determined by:
1.taking the product of (x) the Annual Award Base Number multiplied by (y) forty percent (40%); and
2.dividing such product by two (2) (representing a conversion to the Annual RSU Share number based on a 2:1 option to RSU ratio);
provided that the number of Shares covered by each Annual RSU will be rounded down to the nearest whole Share.  Each Annual RSU will be effective on the date of the applicable Annual Meeting, if, as of such Annual Meeting date, the applicable Outside Director will have served on the Board as a Director for at least the preceding six (6) months; provided that any Outside Director who is not continuing as a Director following the applicable Annual Meeting will not receive an Annual RSU with respect to such Annual Meeting.  Subject to Section 5 below and Section 14 of the Plan, each Annual RSU will vest as to one hundred percent (100%) of the Shares subject thereto upon the earlier of the one (1) year anniversary of the grant date or the day prior to the Company’s next Annual Meeting occurring after the grant date, in each case, provided that the Outside Director continues to serve as an Outside Director through the applicable vesting date.
 - 3 -

(d)Annual Award Base Number.  For purposes of this Policy, “Annual Award Base Number” means the number of Shares that would be subject to an Option with a Value of $350,000 if such Option was granted under the Plan on the date of the applicable Annual Meeting.
(e)Value.  For purposes of this Policy, “Value” means, with respect to a stock option, its grant date value calculated in accordance with the Black-Scholes option valuation methodology utilized by the Company for equity grants to Company executives, or such other methodology the Board or Compensation Committee may determine prior to the grant of the stock option becoming effective, as applicable, consistent, as determined by the Board or Compensation Committee, with the general methodology used to value equity grants to Company executives. 
(f)No Discretion.  No person will have any discretion to select which Outside Directors will be granted any Awards under this Policy or to determine the number of Shares to be covered by such Awards, as applicable (except as provided in Section 6 below).
(g)Terms Applicable to all Options Granted Under this Policy. The per Share exercise price for an Option granted under this Policy will be one hundred percent (100%) of the Fair Market Value on the grant date.  The maximum term to expiration of an Option granted under this Policy will be ten (10) years, subject to earlier termination as provided in the Plan.
3.EXPENSES
Each Outside Director’s reasonable, customary, and properly documented expenses in connection with service on the Board or any committee of the Board will be reimbursed by the Company. 
4.OUTSIDE DIRECTOR COMPENSATION LIMITS
Until at least the date of the Annual Meeting held in 2025 (the “2025 Annual Meeting”), neither the cash retainers nor the Value of equity compensation payable under this Policy to Outside Directors will be raised to a level that is in excess of the 75th percentile of the cash retainers or value of equity award compensation, respectively, paid by the then-applicable Peer Group to their non-employee directors.  For purposes of this Policy, “Peer Group” means the peer group of the Company as approved by the Compensation Committee of the Board (the “Compensation Committee”) or the Board from time to time.  
Notwithstanding the foregoing, newly elected or appointed Outside Directors may receive total cash and equity compensation in connection with their initial appointment or election to the Board having an aggregate value (with value of equity compensation calculated as the Value of such equity compensation under the Policy) of up to two times (2x) the total of (x) the aggregate amount of annual cash retainers (for the avoidance of doubt, including all cash retainers for serving as an Outside Director, including cash retainers for serving as non-executive Chair of the Board or as a chair or member of an applicable committee) that could be provided to any incumbent Outside Director under the terms of the Policy as then in effect, and (y) the Value of Annual Awards that could be provided to any incumbent Outside Director under the terms of the Policy as then in effect.
The Company will assess and determine its Peer Group annually based on such factors as the Compensation Committee or the Board, as applicable, deems relevant after discussion with the Compensation Committee’ compensation consultant, and shall consider, among other companies as determined appropriate by the Compensation Committee or the Board, as applicable, for selection as Peer Group companies those companies which are: (a) operating in the same industries as the Company (by reference to Global Industry Classification Standard code or similar reasonable identifiers, which may change from time to time), and (b) similar in size to the Company based on market capitalization (or, during volatile market conditions, revenue, if so determined by the Compensation Committee or the Board, as applicable).
 - 4 -

Notwithstanding anything in the foregoing to the contrary, all determinations related to the foregoing, including but not limited to the determination of the Peer Group, the cash retainers and value of equity award compensation paid by the Peer Group and/or under the Policy to incumbent Outside Directors, the determination of what constitutes the 75th percentile of such amounts, and the date or dates as of which such 75th percentile is to be assessed will be determined in the good faith of the Compensation Committee or the Board after consideration of the advice of the Compensation Committee’s compensation consultant as contemplated above.
5.ADDITIONAL PROVISIONS
All provisions of the Plan and form of award agreement approved for use under the Plan not inconsistent with this Policy will apply to Awards granted to Outside Directors.
6.SECTION 409A
It is the intent of this Policy that this Policy and all payments hereunder be exempt from or otherwise comply with the requirements of Section 409A (as defined below) so that none of the compensation to be provided hereunder will be subject to the additional tax imposed under 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and guidance thereunder, as may be amended from time to time (together, “Section 409A”), and any ambiguities or ambiguous terms herein will be interpreted to be so exempt or comply.  In no event will cash compensation or expense reimbursement payments under this Policy be paid after the later of (i) 15th day of the 3rd month following the end of the Company’s fiscal year in which the compensation is earned or expenses are incurred, as applicable, or (ii) 15th day of the 3rd month following the end of the calendar year in which the compensation is earned or expenses are incurred, as applicable.  As such, all payments under this Policy are intended to fall within the “short-term deferral” exception under Section 409A.  In no event will the Company be obligated to reimburse an Outside Director for any taxes imposed or other costs incurred as a result of Section 409A or otherwise because of the receipt of compensation under this Policy.
7.REVISIONS
Except as provided herein, he Board or any committee designated by the Board (a “Designated Committee”), may amend, suspend or terminate this Policy at any time and for any reason.  Unless determined otherwise by the Board, the Compensation Committee is a Designated Committee under this Policy. This includes, that the Board or a Designated Committee in its discretion may at any time change and otherwise revise the terms of the cash compensation granted under this Policy, including, without limitation, the amount of cash and timing of unearned compensation to be paid on or after the date the Board or a Designated Committee, as applicable determines to make any such change or revision.  Any amendment to the terms of any cash compensation granted under the Policy will be effective no earlier than the date such amendment is made. Further, except as provide herein, the Board or a Designated Committee in its discretion may at any time change and otherwise revise the terms of Awards granted under this Policy, including, without limitation, the number of Shares subject thereto, the vesting schedule of Awards, and the type of Awards to be granted on or after the date the Board or a Designated Committee, as applicable, determines to make any such change or revision.  If, on the date of an Award grant under this Policy, an equity incentive plan other than the Plan is the primary equity incentive plan used by the Company, all references to the Plan in this Policy shall, with respect to such Award, be deemed to refer to the Company’s primary equity incentive plan in use at the time of such Award grant, including that references to Section 11 of the Plan shall be deemed to refer to the section(s) of such primary equity incentive plan relating to the per person limits on the number or value of Shares that an Outside Director may receive under such plan during the period specified therein, and references to Section 14 of the Plan shall be deemed to refer to the section(s) of such primary equity incentive plan relating to adjustments to the Shares, dissolution or liquidation or the Company, and/or merger or Change in Control (or similar transactions) of the Company.  
 - 5 -

Notwithstanding the foregoing, no amendment, alteration, suspension or termination of this Policy will materially impair the rights of an Outside Director with respect to compensation that already has been paid or awarded, unless otherwise mutually agreed between the Outside Director and the Company.  Further, and notwithstanding the foregoing, until at least the date of the 2025 Annual Meeting, this Policy shall not be amended in a manner inconsistent with the terms of the derivative settlement entered into by the Company on January 13, 2021 and referenced in the Form 8-K dated February 5, 2021.
Termination of this Policy will not affect the Board’s or the Compensation Committee’s ability to exercise the powers granted to it under the Plan with respect to Awards granted under the Plan pursuant to this Policy prior to the date of such termination.   
 - 6 -aaww-ex101_765.htm

Exhibit 10.1

ATLAS AIR WORLDWIDE HOLDINGS, INC.

STRATEGIC BONUS PLAN

FOR SENIOR EXECUTIVES (EVP and above)

(2021 – 2022)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adopted by Compensation Committee:  As of February 3, 2021

 

 

 

 

 

ATLAS AIR WORLDWIDE HOLDINGS, INC.

STRATEGIC BONUS PLAN

FOR SENIOR EXECUTIVES (EVP and above)

 

	
Section 1.  
	
Purpose.

The purpose of the Program is to set forth certain terms and conditions governing short term incentive awards to executives of Atlas Air, Inc. (“Atlas Air”). The Program shall be effective as of January 1, 2021 and shall be applicable for the Program Period unless amended or terminated by the Committee pursuant to Section 10. Capitalized terms not defined herein shall have the meanings given in the Atlas Air Worldwide Holdings, Inc. (“AAWW”) 2018 Incentive Plan (the “Plan”). 

	
Section 2.  
	
Definitions.

2.1.Award 

shall mean an opportunity to earn benefits under the Program.

2.2.Atlas 

shall mean AAWW or Atlas Air.

2.3.Base Salary 

shall mean an Eligible Employee’s actual base salary for the applicable period.

2.4.Board 

shall mean the Board of Directors of AAWW.

2.5.Beneficiary 

shall mean a Participant's beneficiary designated pursuant to Section 8.

2.6.Cause shall mean (i) the Participant’s refusal or failure (other than during periods of illness or Disability) to perform his or her material duties and responsibilities to Atlas, (ii) the conviction or plea of guilty or nolo contendere of the Participant in respect of any felony, other than a motor vehicle offense, (iii) the commission of any act which causes material injury to the reputation, business or business relationships of Atlas including, without limitation, any material breach of written policies of Atlas with respect to trading in securities, (iv) other acts of fraud in connection with the Participant’s duties and responsibilities to Atlas, including, without limitation, misappropriation, theft or embezzlement in the performance of the Participant's duties and responsibilities as an employee of Atlas, or (v) a violation of any material Atlas policy, including, without limitation, a violation of the laws against workplace discrimination.

2.7.Change in Control shall mean the occurrence of any of the following:

(i) any “person” (as used herein, as defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d) and 14(d) thereof) or “group” (as used herein, as defined in Section 13(d) of the Exchange Act), acquires ownership or beneficial ownership of AAWW securities that, together with securities held by such person or group, constitutes more than 50% of the total fair market value of the issued and outstanding shares or the total voting power of AAWW;

 

(ii)  any “person” or “group,” during the 12-month period ending on the date of the most recent acquisition by such “person” or “group” acquires ownership of AAWW securities that constitute 30% or more of the total fair market value of the issued and outstanding shares or the total voting power of AAWW;

1

 

 

 

 

 

(iii)  the replacement of a majority of members of the Board during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the appointment or election;

 

(iv)   the acquisition by a person or group, during the 12-month period ending on the date of the most recent acquisition by such person or group, of assets from AAWW that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all the assets of AAWW; or 

 

(v)   the consummation of a complete liquidation or dissolution of AAWW.

 

For purposes of determining whether a Change in Control has occurred (i) shares of AAWW received upon conversion of an option or warrant is considered to be an acquisition of shares of AAWW and (ii) in the event the persons who were beneficial owners of AAWW shares immediately prior to the consummation of a merger, share exchange, business combination or other similar corporate transaction continue to beneficially own, directly or indirectly, more than 50% of total fair market value of the issued and outstanding shares or the total voting power of AAWW (including a corporation or entity that, as a result of such transaction, owns AAWW or all or substantially all of AAWW’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such consummation of such transaction, such transaction shall not constitute a Change in Control. 

 

Notwithstanding anything to the contrary herein, with respect to any amounts payable hereunder that constitute deferred compensation for purposes of Section 409A, such payment or settlement may accelerate upon a Change in Control for purposes of this Program only if such Change in Control also constitutes a “change in control event” (as that term is defined at Section 1.409A-3(i)(5) of the Treasury Regulations)  (it being understood that vesting of amounts payable hereunder may accelerate upon a Change in Control, even if payment of such amounts may not accelerate pursuant to this sentence).

 

2.8.Change in Control Good Reason shall mean (i) a material reduction in the Participant’s duties and responsibilities from those of the Participant’s most recent position with Atlas, (ii) a reduction of the Participant’s aggregate salary, benefits and other compensation (including any incentive opportunity) from that which the Participant was most recently entitled during Employment other than in connection with a reduction as part of a general reduction applicable to all similarly-situated employees of Atlas, or (iii) a relocation of the Participant to a position that is located greater than 40 miles from the location of such Participant’s most recent principal location of Employment with Atlas; provided, however, that the Employee will be treated as having resigned for Change in Control Good Reason only if he or she provides Atlas with a notice of termination within 90 days of the initial existence of one of the conditions described above, following which Atlas shall have 30 days from the receipt of the notice of termination to cure the event specified in the notice of termination and, if Atlas fails to so cure the event, the 

2

 

 

 

 

Participant must terminate his or her Employment not later than 30 days following the end of such cure period.

2.9.Code 

shall mean the Internal Revenue Code of 1986, as amended from time to time.

2.10.Committee 

shall mean the Compensation Committee of the Board.

2.11.Disability shall mean, with respect to any Participant who is party to an employment, severance-benefit, change in control or similar agreement with Atlas that contains a definition of “Disability,” the definition set forth in such agreement. In the case of any other Participant, except as expressly provided otherwise in an Award agreement, “Disability” shall mean such Participant’s having been continuously disabled from performing duties assigned to the Participant for a period of not less than six consecutive calendar months, in which case such Disability shall be deemed to have commenced on the date following the end of such six consecutive calendar months.

2.12.Eligible Employee 

shall mean any of the Chief Executive Officer, President and Executive Vice Presidents of Atlas Air, Inc. and such other Atlas senior executive officers as shall be designated by the Committee.

2.13.Good Reason shall mean (i) a material reduction in the Participant’s annual Base Salary, Target Bonus Percentage, or target long-term incentive award opportunity, in each case as then in effect, or other material benefits provided to officers of Atlas, except where such reduction is part of a general reduction in salary or benefits by Atlas or (ii) a material reduction in the Participant’s title or job responsibilities; provided, however, that a Participant shall be treated as having resigned due to Good Reason only if he or she provides Atlas with a notice of termination within 90 days of the initial existence of one of the conditions described above, following which Atlas shall have 30 days from the receipt of the notice of termination to cure the event specified in the notice of termination and, if Atlas fails to so cure the event, the Participant must terminate his or her Employment not later than 30 days following the end of such cure period.

2.14.Participant 

shall mean any Eligible Employee during such Eligible Employee’s period of participation in the Program. 

2.15.Program 

shall mean this Atlas Air Worldwide Holdings, Inc. Strategic Bonus Plan for Senior Executives, as it may be amended from time to time.

2.16.Performance Criteria shall mean specified criteria, other than solely the continuation of employment or solely the passage of time, the satisfaction of which is a condition for the grant, exercisability, vesting or full enjoyment of an Award.

2.17.Program Period 

shall mean the period from January 1, 2021 through March 31, 2022.

2.18.Retirement shall mean a termination of a Participant’s Employment with Atlas by the Participant on or after the Participant (i) attains age fifty-five (55) and has completed ten (10) years of service with Atlas, and (ii) has given not less than three (3) months’ advanced written notice of such proposed Retirement to the then current Chief Executive Officer of AAWW; provided, however, that if such Participant is terminated by Atlas for Cause after providing such 

3

 

 

 

 

advanced written notice, such termination shall not be considered a Retirement, as defined herein.  Notwithstanding clause (ii) above, in the event of a proposed Retirement of the then current Chief Executive Officer of AAWW, he or she must give not less than six (6) months’ advance written notice to the Board and a majority of the members of the Board (disregarding the Board membership of the Chief Executive Officer of AAWW for these purposes) must approve such retirement.

2.19.Termination of Service shall mean the date a Participant ceases to be an Eligible Employee. 

	
Section 3.  
	
Administration.

The Program shall be administered by the Committee. The Committee shall have full power and authority in its sole discretion to (i) construe and interpret the Program, (ii) establish and amend administrative regulations to further the purpose of the Program, (iii) determine the extent to which Award payments have been earned by virtue of satisfying the goals described in Section 5 and whether any other Performance Criteria have been satisfied, (iv) determine the amount otherwise payable under Section 5, (v) determine whether to settle a portion of the Award in AAWW stock, and (vi) take any other action necessary to administer the Program.  All decisions, actions, or interpretations of the Committee shall be final, conclusive, and binding upon all Participants.  

	
Section 4.  
	
Participation.

	
4.1
	
General. Each Eligible Employee shall participate in the Program if he or she is employed as an Eligible Employee on the first day of the Program Period. An individual who becomes an Eligible Employee during a Program Period following the first day of the Program Period, but prior to September 30 of the applicable Program Period, may participate only with respect to Base Salary earned on and after the date he or she first becomes an Eligible Employee.  

	
4.2
	
Change of Title/Position. If an Eligible Employee is promoted during a Program Period such that his or her Base Salary, Target Bonus Percentage (as defined below) and/or Maximum Bonus Percentage (as defined below) increases, (i) for the portion of the Program Period prior to such promotion, the Award will be calculated as set forth herein using (A) the Base Salary earned prior to the effective date of such promotion, and (B) the Target Bonus Percentage and Maximum Bonus Percentage applicable to the Eligible Employee’s title/position prior to the effective date of such promotion, and (ii) for the portion of the Program Period following such promotion, the Award will be calculated as set forth herein using (A) the Base Salary earned on and after the effective date of such promotion, and (B) the Target Bonus Percentage and Maximum Bonus Percentage applicable to the Eligible Employee’s new title/position on and after the effective date of such promotion.   

	
4.3
	
Other Compensation. Any determination by the Committee to provide incentive compensation to an Eligible Employee other than as described in this Section 4 shall be treated as a separate award made outside the Program.

4

 

 

 

 

	
Section 5.  
	
Determination of Awards.

5.1.Target Bonus Percentage. The “Target Bonus Percentage” shall mean the following percentage of Base Salary for each Participant, as such percentages may be increased by the Committee from time to time: (i) one hundred twenty-five percent (125%) of Base Salary for the Chief Executive Officer of AAWW, (ii) one hundred ten percent (110%) of Base Salary for Executive Vice Presidents who also hold the title of Chief Executive Officer of Titan Aviation Holdings, Inc., (iii) ninety-five percent (95%) of Base Salary for Executive Vice Presidents who also hold the title of General Counsel or Chief Financial Officer, and (iv) eighty-five percent (85%) of Base Salary for Executive Vice Presidents who also hold the title of Chief Operating Officer.

5.2.Maximum Bonus Award. The maximum bonus payable under an Award for the Program Period will be the lesser of (i) the dollar limit set forth in Section 4(c) of the Plan, and (ii) the following percentage of Base Salary for each Participant, as such percentages may be increased by the Committee from time to time: (A) two hundred fifty percent (250%) of Base Salary for the Chief Executive Officer of AAWW, (B) two hundred twenty percent (220%) for the Executive Vice President of AAWW who also holds the title of Chief Executive Officer of Titan Aviation Holdings, Inc., (C) one hundred ninety percent (190%) of Base Salary for Executive Vice Presidents who also hold the title of General Counsel or Chief Financial Officer of AAWW, and (iv) one hundred seventy percent (170%) of Base Salary for the Executive Vice President who also holds the title of Chief Operating Officer (each, a “Maximum Bonus Percentage”).  

5.3.Performance Measures. Payment under an Award is conditioned upon achievement of the Adjusted Income Goal, Service Reliability Goal and Management Business Objectives Goal, each as described below. 

(a)Adjusted Income Goal. The Adjusted Income Goal is based on Atlas’s aggregate adjusted income from continuing operations, net of taxes (“Adjusted Income”) as reported in Atlas’s press release reporting financial results for the 2021 fiscal year and for the fiscal quarter ending March 31, 2022, as may be further provided in any exhibit to the Program (the “Adjusted Income Goal”). For the Program Period, the threshold Adjusted Income level (which must be met before any amounts will be payable under Awards), the maximum Adjusted Income level, intermediate Adjusted Income levels, and the percentage of each Participant’s target bonus award that will be deemed achieved at each such profit level, will be determined by the Committee.

(b)Service Reliability Goal. The Service Reliability Goal is based on the level of achievement of such goals as the Committee may determine for the Program Period (the “Service Reliability Goal”), as may be further provided in any exhibit to the Program.

(c)Management Business Objectives Goal. The Management Business Objectives Goal (“MBO Goals”) reflects the level of achievement of such individual MBOs as may be determined in the case of any Participant for the Program Period.

(d)Effect of Corporate Transactions and other Exigencies. Without limiting the generality of the foregoing, the Committee shall have the authority to identify objectively determinable events (for example, but without limitation, acquisitions or 

5

 

 

 

 

dispositions) which, if they occur, would have a material effect on objective Performance Criteria applicable to Awards under the Program, and to adjust such Performance Criteria in an objectively determinable manner to reflect such events.  

	
Section 6.  
	
Payment of Awards under this Program.

6.1.General. Subject to Section 6.4 and Section 7, a Participant will be entitled to receive payment, if any, under an Award if the Participant is still employed by Atlas on the last day of the Program Period for which the Award is paid, unless in the period between the last day of the Program Period and any payout under the Program, the Participant is terminated by Atlas for Cause or the Participant terminates his or her Employment with Atlas for any reason other than for Good Reason or by reason of a Retirement. A Participant will receive an Award in the manner and at the times set forth in this Section 6.

6.2.Time of Payment. Any amount payable with respect to an Award for a Program Period shall be paid by Atlas within two weeks following certification by the Committee as to achievement of the performance measures set forth in Section 5.3.  

6.3.Form of Payment. All amounts payable for an Award shall be paid in cash or AAWW stock, but AAWW stock may be used, if at all, at the Committee’s discretion in consultation with such Participant, and only for the portion of the Award that exceeds fifty percent (50%) of Base Salary.  

6.4.Termination of Employment.  

(a)In General. Except as provided otherwise in this Section 6.4 or Section 7, a Participant whose Employment terminates for any reason prior to the last day of the Program Period for which an Award is payable shall forfeit such Award.

(b)Termination Bonus Amount. For purposes of this Section 6.4 or Section 7, “Termination Bonus Amount” shall mean a payment with respect to an Award for the Program Period in an amount equal to, (A) in the event the Termination of Service occurs after September 30 of the Program Period, the greater of (1) the amount he or she would have received if he or she was employed by Atlas on the last day of the Program Period based upon actual company performance measured pursuant to the Program (and assuming for such purpose that his or her MBO Goals have been achieved at least at target), or (2) his or her Target Bonus Percentage (such amount, the “Full Termination Bonus Amount”) or (B) in the event the Termination of Service occurs prior to October 1 of the Program Period, the Full Termination Bonus Amount multiplied by a fraction, the numerator of which is the number of days from the commencement of the Program Period until such Termination of Service and the denominator of which is 455.

(c)Death or Disability. In the event of a Participant’s Termination of Service during a Program Period due to his or her death or Disability, the Participant shall be entitled to receive the Termination Bonus Amount.  

(d)Involuntary Termination; Good Reason; Retirement. If a Participant’s Employment terminates during the Program Period by reason of (i) an involuntary termination by Atlas not for Cause, (ii) termination by the Participant for Good Reason, or (iii) Retirement, the Participant shall be entitled to receive the Termination Bonus Amount. Such payment shall be subject to all terms and conditions of the Program, including without limitation the provisions of Section 5 (relating to determination of the Award) and Section 6.2 (relating to the time of payment of the Award). 

6

 

 

 

 

(e)Relationship with Other Agreements. This Section 6.4 shall not apply to the extent the rights of a Participant in such circumstances are governed by another agreement.    

	
Section 7.  
	
Change in Control.

In the event of a Change in Control, payment with respect to an Award for the Program Period in which such Change in Control occurred shall be an amount equal to the greater of (a) the applicable Target Bonus Percentage and (b) actual company performance measured pursuant to the Program (such greater amount, the “CIC Bonus Amount”). In the event a Participant’s Employment is terminated during the Program Period in which a Change in Control occurs (i) following such Change in Control by reason of (A) an involuntary termination by Atlas not for Cause, (B) termination by the Participant for Change in Control Good Reason, (C) Retirement, (D) death, or Disability; or, (ii) within six months prior to such Change in Control, by Atlas not for Cause or by the Participant for Change in Control Good Reason, in each case, instead of the treatment described in Section 6.4, such Participant shall be entitled to the CIC Bonus Amount (for the avoidance of doubt, without proration). Such payment shall be subject to all terms and conditions of the Program, including without limitation the provisions of Section 5 (relating to determination of the Award) and Section 6.2 (relating to the time of payment of the Award).

	
Section 8.  
	
Beneficiary Designation.

8.1.Designation and Change of Designation. Each Participant shall file with Atlas a written designation of one or more persons as the Beneficiary who shall be entitled to receive the Award, if any, payable under the Program upon the Participant’s death. A Participant may, from time to time, revoke or change his or her Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with Atlas. The last such designation received by Atlas shall be controlling; provided, however, that no designation, or change or revocation thereof, shall be effective unless received by Atlas prior to the Participant’s death, and in no event shall it be effective as of any date prior to such receipt.

8.2.Absence of Valid Designation. If no such Beneficiary designation is in effect at the time of a Participant’s death, or if no designated Beneficiary survives the Participant, or if such designation conflicts with law, the Participant’s estate shall be deemed to have been designated as the Participant’s Beneficiary and shall receive the payment of the amount, if any, payable under the Program upon his death. If Atlas is in doubt as to the right of any person to receive such amount, Atlas may retain such amount, without liability for any interest thereon, until the rights thereto are determined, or Atlas may pay such amount into any court of appropriate jurisdiction and such payment shall be a complete discharge of the liability of the Program and Atlas therefor.

7

 

 

 

 

	
Section 9.  
	
General Provisions.

9.1.Program to be Unfunded. The Program is intended to constitute an unfunded incentive compensation arrangement. Nothing contained in the Program, and no action taken pursuant to the Program, shall create or be construed to create a trust of any kind. A Participant’s right to receive an Award shall be no greater than the right of an unsecured general creditor of Atlas. All Awards shall be paid from the general funds of Atlas, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such Awards. There shall not vest in any Participant or Beneficiary any right, title, or interest in and to any specific assets of Atlas.

9.2.Section 409A of the Code. Awards under the Program are intended to be exempt from the requirements of Section 409A of the Code and shall be construed and administered accordingly. Notwithstanding anything to the contrary in the Program, neither Atlas, nor any affiliate, nor the Committee, nor any person acting on behalf of Atlas, any affiliate, or the Committee, shall be liable to any Participant or to the estate or beneficiary of any Participant or to any other holder of an Award by reason of any acceleration of income, or any additional tax, asserted by reason of the failure of an Award to satisfy the requirements of Section 409A or by reason of Section 4999 of the Code; provided, that nothing in this Section 9.2 shall limit the ability of the Committee or Atlas to provide by separate express written agreement with a Participant for a gross-up payment or other payment in connection with any such tax or additional tax.

9.3.Rights Limited; Conflicts. Nothing contained in the Program shall give any Eligible Employee the right to continue in the employment of Atlas, or limit the right of Atlas to discharge an Eligible Employee. If there is a conflict between this Program and another senior executive employment program or arrangement, such other program or arrangement shall control. 

9.4.Governing Law. The Program shall be construed and governed in accordance with the laws of the State of New York.  

9.5.Taxes. There shall be deducted from all amounts paid under the Program all federal, state, local and other taxes required by law to be withheld with respect to such payments.

	
Section 10.  
	
Amendment, Suspension, or Termination.

Except with respect to 6.4(c) for any Program Period in effect, the Committee reserves the right to amend, suspend, or terminate the Program at any time. Without limiting the generality of the foregoing, the Committee reserves the right to reduce or replace at the same or similar value any Award granted under the Program in the event the Committee determines in its sole discretion, following consultation with such impacted Participant, that such action is necessary or advisable in order to maintain the Company’s compliance with the terms of the Coronavirus Aid, Relief, and Economic Security Act and any applicable guidance issued thereunder or any agreement entered into by the Company or any of affiliate thereunder, in each case as may be amended from time to time.

 

8

 

 

 

 

 

	
Section 11.  
	
 Awards Subject to Clawback

Pursuant to AAWW’s Executive Compensation Clawback Policy, as the same is in effect following its adoption by the Board and as may be subsequently amended from time to time (the “Clawback Policy”), by his or her acceptance of an Award under the Program, the Participant agrees that the Company may withhold, and Participant will forfeit, compensation otherwise payable under an Award or seek recovery from, and the Participant agrees to repay, compensation previously paid under an Award, as the case may be, as provided by the Clawback Policy, or to the extent required to comply with applicable law. 

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00327-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00327-of-00352.parquet"}]]