Document:

Exhibit
10.1

 

HARDINGE
INC.

 

CASH
INCENTIVE PLAN

 

(Effective
January 1, 2006)

 

 

1.             Objectives.

 

                The Hardinge
Inc. Cash Incentive Plan (the “Plan”) is designed to retain executives and
reward them for making major contributions to the success and profitability of
the Company.  These objectives are
accomplished by making incentive Awards under the Plan.

 

2.             Definitions.

 

                (a)           Award—The
Award to a Plan participant pursuant to terms and conditions of the Plan.

 

                (b)           Award Agreement—An
agreement between the Company and a participant that sets forth the terms,
conditions and limitations applicable to an Award.

 

                (c)           Board—The
non-management Directors of Hardinge Inc.

 

                (d)           Committee—The
Compensation Committee of the Board.

 

                (e)           Company—Hardinge
Inc. (“Hardinge”) and any other corporation in which Hardinge controls,
directly or indirectly, fifty percent (50%) or more of the combined voting
power of all classes of voting securities.

 

                (f)            Executive Officer—Any
officer of the Company identified by the Company in its annual report on Form
10-K filed with the Securities and Exchange Commission as an executive officer
of the Company.

 

                (g)           Target Award—The
Award expressed as a percentage of annualized base remuneration, which shall
include Retention Bonuses, that may be earned by a participant for achievement
of the target level of performance.

 

3.             Eligibility.

 

                Only
Executive Officers are eligible for participation in the Plan.

 

 

4.             Administration.

 

                The
Plan shall be administered by the Committee which shall have full power and
authority to construe, interpret and administer the Plan.  Each decision of the Committee shall be
final, conclusive and binding upon all persons. 
No later than ninety (90) days after the start of each calendar year,
the Committee shall recommend to the Board and the Board shall finally:  (i) determine which Executive Officers are in
positions in which they are likely to make substantial contributions to the
Company’s success and therefore participate in the Plan for the year; (ii) set
Target Awards for each participant; (iii) establish performance goals and
performance goal measures as provided by Section 5; and (iv) establish the
terms and conditions of the Award in effect for the year.

 

5.             Performance Goals.

 

                (a)           The Committee shall recommend to the
Board and the Board shall finally establish performance goals applicable to a
particular calendar year no later than ninety (90) days after the start of the
year while the outcome of the performance goal is substantially uncertain.

 

                (b)           Each performance goal applicable to a
year shall identify one or more business criteria that is to be monitored
during the year.  Such business criteria
include any of the following:

 

                Financial
Business Criteria:

 

	
   

  	
   

  	
  Net income

  	
   

  	
  Margin

  
	
   

  	
   

  	
  Debt reduction

  	
   

  	
  Earnings per share

  
	
   

  	
   

  	
  Stockholder return

  	
   

  	
  Cash flow

  
	
   

  	
   

  	
  Earnings Before Interest

  	
   

  	
  Revenue

  
	
   

  	
   

  	
  Taxes and Depreciation

  	
   

  	
  Revenue growth

  
	
   

  	
   

  	
  Net Working Capital

  	
   

  	
  Return on net assets

  
	
   

  	
   

  	
  Return on investment

  	
   

  	
  Profit before tax

  
	
   

  	
   

  	
  Return on invested capital

  	
   

  	
  Profit after tax

  
	
   

  	
   

  	
  Return on equity

  	
   

  	
  Market capitalization

  
	
   

  	
   

  	
  Gross operating profit

  	
   

  	
  Total stockholder return

  
	
   

  	
   

  	
  Return on research and development investment

  	
   

  	
   

  

 

                Performance
goals based on financial business criteria may be set on an earnings before
interest and taxes, earnings before interest, taxes and depreciation or an
after tax basis, may be defined by absolute or relative measures, and may be
valued on a growth or fixed basis.

 

 

2

 

                Strategic
and Operational Business Criteria:

 

	
   

  	
   

  	
  Quality improvements

  	
   

  	
  Market share

  
	
   

  	
   

  	
  Cycle time reductions

  	
   

  	
  Reduction in product
  returns

  
	
   

  	
   

  	
  Manufacturing improvements
  and/or efficiencies

  	
   

  	
  Customer satisfaction 

  improvements

  
	
   

  	
   

  	
  Strategic positioning

  	
   

  	
  Operational and strategic

  
	
   

  	
   

  	
  programs

  	
   

  	
  programs

  
	
   

  	
   

  	
  Business/information

  	
   

  	
  Expense management

  
	
   

  	
   

  	
  systems improvements

  	
   

  	
  New product revenue

  
	
   

  	
   

  	
  Infrastructure support

  	
   

  	
  Customer programs

  
	
   

  	
   

  	
  programs

  	
   

  	
  Technology development

  
	
   

  	
   

  	
  Human resource programs

  	
   

  	
  programs

  
	
   

  	
   

  	
  New product releases

  	
   

  	
  Maintain appropriate
  capital

  
	
   

  	
   

  	
  Inventory turns

  	
   

  	
  structure

  

 

                (c)           The Committee shall recommend to the
Board and the Board shall finally determine the target level of performance
that must be achieved with respect to each criteria that is identified in a
performance goal in order for a performance goal to be treated as
attained.  In establishing the target
level, the Board will specify the measures to be used to evaluate performance
goal achievement and the weighting of each performance goal.  The Board may also establish minimum
threshold and maximum performance criteria and may make Target Awards based on
its discretion without precise objective measurements.  Profit, earnings and revenues used for any
performance criteria measurements may exclude in the Committee’s
discretion:  gains or losses on operating
asset sales or dispositions; asset write-downs; litigation or claim judgments
or settlements; accruals for historic obligations; effect of changes in tax law
or rate on deferred tax liabilities; accruals for reorganization and
restructuring programs; uninsured catastrophic property losses; the cumulative
effect of changes in accounting principles; and any extraordinary non-recurring
items as described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial performance appearing in the
Company’s annual report to shareholders for the applicable year.

 

                (d)           The Board may base performance goals
on one or more of the foregoing business criteria.  In the event performance goals are based on
more than one business criteria, the Board may determine to make Awards upon
attainment of the performance goal relating to any one or more of such
criteria, provided the performance goals, when established, are stated as
alternatives to one another.

 

                (e)           At the time the Board sets
performance goals, the Board will establish the Target Award for each
participant.

 

 

3

 

6.             Awards.

 

                (a)           The Committee shall make Awards only
in the event the Committee certifies in writing prior to payment of the Award
that the performance goal or goals under which the Award is to be paid has or
have been attained.

 

                (b)           Depending on performance, actual
Awards may vary from the Target Award, reflecting the minimum threshold to the
maximum performance level of goal achievement.

 

                (c)           The Committee in its sole and
absolute discretion may reduce but not increase the amount of an Award
otherwise payable to a participant upon attainment of the performance goal or
goals established for a year.

 

                (d)           A participant’s performance must be
satisfactory, regardless of Company performance, before he or she may be paid
an Award.

 

                (e)           In the event the performance goals
for a year are attained, the Committee shall grant all or such portion of an
Award for the year as has been earned based on performance achievement to any
participant who is appointed or promoted to an Executive Officer position
covered by this Plan during the year, or whose employment is terminated during
the year, or who suffers a permanent disability.

 

7.             Payment of Awards.

 

                Each
participant shall be paid the Award in cash as soon as practicable after the
Committee has determined that Awards have been earned and are payable.

 

8.             Tax Withholding.

 

                The
Company shall have the right to deduct applicable taxes from any Award payment.

 

9.             Amendment, Modification, Suspension or Discontinuance of
this Plan.

 

                The
Board may amend, modify, suspend or terminate the Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other
purpose permitted by law.  No amendment,
suspension, termination or discontinuance may impair the right of a participant
or his or her designated beneficiary to receive any Award accrued prior to the
later of the date of adoption or the effective date of such amendment,
suspension, termination or discontinuance. 
The exercise of the Committee’s discretion as permitted by Section 6(c)
shall not be deemed to constitute an amendment or modification subject to the
provisions of this Section 9.

 

 

4

 

10.          Termination of Employment.

 

                If
the employment of a participant terminates, other than pursuant to paragraphs
(a) and (b) of this Section 10, all unpaid Awards shall be cancelled
immediately, unless the Committee in its discretion determines otherwise.

 

                (a)           Retirement—When
a participant’s employment terminates as a result of retirement, the
participant will receive an Award reflecting performance and actual period of
employment during the calendar year of retirement.

 

                (b)           Death or Disability of a
Participant.

 

                (i)            In
the event of a participant’s death, the participant’s estate or beneficiaries
shall have the right to receive an Award reflecting performance and actual
period of employment during the calendar year of death or disability.  Rights to any such outstanding Awards shall
pass by will or the laws of descent and distribution in the following
order:  (a) to beneficiaries so
designated by the participant; if none, then (b) to a legal representative of
the participant; if none, then (c) to the persons entitled thereto as
determined by a court of competent jurisdiction.  Awards so passing shall be made at such times
and in such manner as if the participant were living.

 

                (ii)           In
the event a participant is disabled, the participant will receive an Award
reflecting performance and actual period of employment during the calendar
year.  In the event the participant is
incapacitated, the Award will be paid to the participant’s authorized legal
representative.

 

                (iii)          After
the death or disability of a participant, the Committee may in its sole
discretion at any time (a) terminate restrictions in Award Agreements; (b)
accelerate any or all Awards; and (c) instruct the Company to pay the total of
any accelerated payments in a lump sum to the participant, the participant’s
estate, beneficiaries or representative.

 

                (iv)          In
the event of uncertainty as to interpretation of or controversies concerning
this paragraph (b) of Section 10, the Committee’s determinations shall be
binding and conclusive.

 

11.          Cancellation and Rescission of Awards.

 

                Unless
the Award Agreement specifies otherwise, the Committee may cancel any unpaid
Awards at any time if the participant is not in compliance with all other
applicable provisions of the Award Agreement and the Plan.  Awards may also be cancelled if the Committee
determines that the participant has at any time engaged in activity harmful to
the interest of or in competition with the Company.

 

 

5

 

12.          Nonassignability.

 

                No
award or any other benefit under the Plan shall be assignable or transferable
by the participant during the participant’s lifetime.

 

13.          Unfunded Plan.

 

                The
Plan shall be unfunded.  Although
bookkeeping accounts may be established with respect to participants, any such
accounts shall be used merely as a bookkeeping convenience.  The Company shall not be required to
segregate any assets for payment under the Plan, nor shall the Plan be construed
as providing for such segregation, nor shall the Company nor the Board nor the
Committee be deemed to be a trustee of any Award under the Plan.  Any liability of the Company to any
participant with respect to an Award under the Plan shall be based solely upon
any contractual obligations that may be created by the Plan and any Award
Agreement; no such obligation of the Company shall be deemed to be secured by
any pledge or other encumbrance on any property of the Company.  Neither the Company nor the Board nor the
Committee shall be required to give any security or bond for the performance of
any obligation that may be created by the Plan.

 

14.          No Right to Continued Employment.

 

                Nothing
in this Plan shall confer upon any employee any right to continue in the employ
of the Company or shall interfere with or restrict in any way the right of the
Company to discharge an employee at any time for any reason whatsoever, with or
without good cause.

 

15.          Effective Date.

 

                The
Plan became effective as of January 1, 2006. 
The Board may terminate or suspend the Plan at any time.  No Awards may be made while the Plan is
suspended or after it is terminated.

 

6Exhibit 10.1

 

2006 Administrative Guidelines for the

Copano Energy, L.L.C.

Management Incentive Compensation Plan

 

The Copano Energy, L.L.C.
Management Incentive Compensation Plan (the “Plan”) is established by the Board
of Directors of Copano Energy, L.L.C. (the “Company”) to encourage and reward
significant contributions to the successful and profitable operation of the
enterprise by (i) management employees of the Company or a subsidiary
thereof or (ii) employees of an Affiliate who performs services in a
management capacity on behalf of the Company or a subsidiary thereof. The
Compensation Committee of the Board, which oversees executive compensation
matters on behalf of the Board, approves the Administrative Guidelines for the
Plan each Plan Year. Terms capitalized in these Administrative Guidelines but
not defined herein shall have the meaning attributed to such terms in the Plan.

 

Participation

 

Participants eligible for
the Plan effective January 1, 2006 for the 2006 Plan Year shall be those
employees of the Company and its Affiliates named in Exhibit A to these
Guidelines. Upon the recommendation of the CEO, the Committee may approve
the entry of additional Participants in the Plan effective on the first day of
any month of the Plan Year following their promotion or employment date. Participants
who enter the Plan during the Plan Year shall be eligible for an Award under
the Plan but, in the discretion of the CEO and Committee Chairman, may only
be eligible for an Award calculated pro rata based upon the period of actual
service during the Plan Year.

 

Bonus
Opportunities

 

The 2006 Target Bonus
level for each proposed Participant is set forth in Exhibit A. The Target
Bonus is defined as a specific percentage of the Participant’s base salary as
of July 1 of the Plan Year that may be earned if, in the opinion of
the Committee, the objectives upon which the opportunity is contingent are
fully achieved.

 

Each Participant’s 2006
bonus is contingent upon 1) the Financial Objectives specified in Exhibit B
to these Guidelines, and 2) the Participant’s Personal Objectives, as
established in accordance with these Guidelines. The CEO and the Committee
shall assess the relative significance of the Financial Objectives and each
Participant’s Personal Objectives and shall assign to each objective a
percentage so that for each Participant, the percentages assigned to the
Financial Objectives shall equal fifty percent (50%) of the Target Bonus and
the percentages assigned to the Personal Objectives shall equal fifty percent
(50%) of the Target Bonus.

 

 

Financial
Objectives

 

For each Financial
Objective, the Committee and the CEO shall approve the following performance
levels:  1) a Threshold Level, 2) a
Target Level, and 3) a Maximum Level, which levels shall be subject to final
approval by the Board.

 

A.           If
performance is less than the Threshold Level, the amount of the Target Bonus
contingent upon that objective will not be paid.

 

B.             If
performance is equal to the Threshold Level, fifty percent (50%) of the amount
of the Target Bonus contingent upon that objective will be paid.

 

C.             If
performance equals the Target Level, one hundred percent (100%) of amount of
the Target Bonus contingent upon that objective will be paid.

 

D.            If
performance equals or exceeds the Maximum Level, one hundred and fifty percent
(150%) of the amount of the Target Bonus contingent upon that objective will be
paid.

 

E.              When
performance falls between the Threshold Level and the Target Level or between
the Target Level and the Maximum Level, the amount of the bonus shall be
determined by straight-line interpolation.

 

F.              In
no circumstances will any bonus be paid from this Plan if cash distributions
paid to unit holders of the Company in regard to any quarter of the Plan Year
are less than $0.40 per unit.

 

When the Committee and
the CEO deem it appropriate but subject to Board approval, the Threshold Level,
Target Level, and Maximum Level of any Financial Objective approved at the
beginning of the Plan Year may be adjusted to reflect significant changes
in the operational environment or in the strategic direction of the Company or
such other factors as the Committee and the CEO may determine.

 

Personal
Objectives

 

Prior to or immediately
following the commencement of any Plan Year, the CEO may require that one
or more Participants (and the Committee may require that the CEO) propose
such Personal Objectives for Committee approval that will determine the extent
to which the percentage of the Target Bonus contingent upon Personal Objectives
has been earned by such Participant. To the extent practical, the Personal Objectives
will be specific, measurable, and represent the contributions required of the
Participant if the Company is to meet or achieve its business plan. During the
Plan Year, Personal Objectives will be reviewed routinely and may be
revised by the Committee and the CEO to reflect changes in job responsibilities
or business objectives.

 

At the end of the Plan
Year, the degree to which each Participant accomplished his or her Personal
Objectives will be reviewed by the CEO (or, in the case of the CEO, by the
Committee), and a score of 0% to 150% will be assigned based upon the CEO’s

 

2

 

subjective opinion of the
performance of the Participant with respect to the Personal Objectives and upon
other factors that the CEO may deem relevant and appropriate. The
percentage that represents the Participant’s score on Personal Objectives shall
be multiplied by the weight assigned to the Personal Objective component of the
Target Bonus to determine the amount of the bonus earned through the Personal
Objectives component of the opportunity.

 

Bonus
Determinations

 

The Participant’s
Financial Objectives result will be combined with the Participant’s Personal
Objectives result to determine the amount of his or her Award. The CEO’s
recommendations for award payments will be presented to the Committee at its
first meeting immediately following the end of the applicable Plan Year, at
which time the Committee shall review performance and consider and approve
bonuses, if any, for all Participants, including the CEO. Awards shall be paid
as soon as reasonably practicable following the Committee’s approval of awards,
but in no case shall awards be paid later than March 15.

 

Participant’s
Termination

 

Participants who
terminate their employment by reason of death, disability (as determined by the
Committee in its sole discretion) or retirement on or after reaching age 65 or,
if prior to age 65, if approved by the Committee, and Participants whose
employment with the Company or an Affiliate is terminated without “cause” shall
be eligible for an award based on a pro rata portion of their Target Bonus and
payable at the same time as all other award payments for the applicable Plan
Year. The pro rata portion of such Target Bonus shall be equal to the amount of
the Participant’s Target Bonus multiplied by a fraction, the numerator of which
is the number of full weeks the participant was actively employed during the
Plan Year and the denominator of which is 52.

 

Notwithstanding anything to the contrary herein, in the event of (i) the
termination of a Participant’s employment by the Company or an Affiliate
without “cause” or (ii) the termination of employment by the Participant
for Good Reason, in either case within one year of a Change of Control, such
Participant shall be entitled to a pro rata portion of his or her Target Award
based upon the termination date and payable within 30 days following
termination.

 

If a Participant’s employment
terminates for any other reason, he or she will not be entitled to any portion
of a Target Award. Participants who voluntarily terminate employment or are
terminated for “cause” before the payment date of awards earned in a prior Plan
Year shall forfeit such Awards.

 

3

 

Conflicts

 

Any conflicts between the
Plan and these Administrative Guidelines shall be resolved in favor of the Plan.
Notwithstanding the preceding sentence, it is the intention of the Board and
the Committee that the Plan shall be construed broadly to accommodate the
provisions and concepts embodied in these Administrative Guidelines to the
extent reasonably possible.

 

4

 

Exhibit A

 

Copano Energy, L.L.C.

2006 Management Incentive Compensation Plan

List of Participants and Target Awards

 

5

 

	
  Participant

  	
   

  	
  Position

  	
   

  	
  Target

  %

  	
   

  
	
  Assiff, Matthew J.

  	
   

  	
  Sr VP and Chief
  Financial Officer

  	
   

  	
  45

  	
  %

  
	
  Bopp, Ronald W.

  	
   

  	
  Sr VP, Corporate
  Development

  	
   

  	
  50

  	
  %

  
	
  Casey, Jeffrey A.

  	
   

  	
  Director,
  Personnel

  	
   

  	
  20

  	
  %

  
	
  Coleman, Thomas

  	
   

  	
  VP, Engineering,
  Mid-Continent

  	
   

  	
  35

  	
  %

  
	
  Corso, Barbara A.

  	
   

  	
  Assistant
  Controller, Reporting and Compliance

  	
   

  	
  20

  	
  %

  
	
  DeYoung, Kathryn

  	
   

  	
  VP, Government
  and Regulatory Affairs

  	
   

  	
  25

  	
  %

  
	
  Eckel, Jr., John

  	
   

  	
  Chairman of the
  Board and CEO

  	
   

  	
  65

  	
  %

  
	
  Eckhart, Brian D.

  	
   

  	
  Sr VP,
  Transportation and Supply

  	
   

  	
  35

  	
  %

  
	
  Fiegener, Lee

  	
   

  	
  VP, Operations,
  Mid-Continent

  	
   

  	
  35

  	
  %

  
	
  Gibson, III, James J.

  	
   

  	
  VP, Processing

  	
   

  	
  30

  	
  %

  
	
  Glover, Thomas S.

  	
   

  	
  Director,
  Financial Planning

  	
   

  	
  20

  	
  %

  
	
  Harrison, Wayne

  	
   

  	
  VP and Chief
  Information Officer

  	
   

  	
  30

  	
  %

  
	
  Lawing, Douglas L.

  	
   

  	
  VP, General
  Counsel and Secretary

  	
   

  	
  45

  	
  %

  
	
  LeBlanc, Patrick C.

  	
   

  	
  Assistant
  Controller, Texas Gulf Coast

  	
   

  	
  20

  	
  %

  
	
  Northcutt, Bruce

  	
   

  	
  President and
  COO

  	
   

  	
  50

  	
  %

  
	
  Paradee, Lari

  	
   

  	
  VP and
  Controller

  	
   

  	
  30

  	
  %

  
	
  Raber, John A.

  	
   

  	
  President and
  COO, Mid-Continent

  	
   

  	
  50

  	
  %

  
	
  Robinson, Sharon

  	
   

  	
  VP, Commercial
  Activities, Mid-Continent

  	
   

  	
  35

  	
  %

  
	
  Roderick, Bruce

  	
   

  	
  VP, Accounting
  and Administration, Mid-Continent

  	
   

  	
  35

  	
  %

  
	
  Theisen, David

  	
   

  	
  Director, Tax

  	
   

  	
  20

  	
  %

  
	
  Thompson, Amber

  	
   

  	
  Assistant
  Controller, Mid-Continent

  	
   

  	
  20

  	
  %

  
	
  White, James T.

  	
   

  	
  VP, Operations

  	
   

  	
  30

  	
  %

  

 

6

 

Exhibit B

 

Copano Energy, L.L.C.

2006 Management Incentive Compensation Plan

Financial Objectives

 

The financial objective
approved by the Board of Directors.

 

7

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