Document:

aaww-ex102_654.htm

Exhibit 10.2

ATLAS AIR WORLDWIDE HOLDINGS, INC.

ANNUAL INCENTIVE PROGRAM

FOR SENIOR EXECUTIVES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adopted by Compensation Committee:  As of March 8, 2018

 

 

ATLAS AIR WORLDWIDE HOLDINGS, INC.

ANNUAL INCENTIVE PROGRAM

FOR SENIOR EXECUTIVES

 

Section 1.  Purpose.

The purpose of the Program is to set forth certain terms and conditions governing cash awards made under Atlas Air Worldwide Holdings, Inc.’s (“AAWW”) 2016 Incentive Plan, as amended (the "Plan").  The Program shall be treated for all purposes as a sub-plan or arrangement for the grant of Cash Awards under the Plan.  The Program shall be effective as of January 1, 2018, and shall be applicable for the 2018 Program Year and subsequent Program Years during the continuance of the Plan unless amended or terminated by the Committee pursuant to Section 10.  Capitalized terms not defined herein shall have the meanings given in the Plan.  

Section 2.  Definitions.

Award 

shall mean an opportunity to earn benefits under the Program.

Atlas 

shall mean AAWW or its subsidiaries, as applicable.

Base Salary 

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

Board 

shall mean the Board of Directors of AAWW.

Beneficiary 

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

Code 

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

Committee 

shall mean the Compensation Committee of the Board.

Eligible Employee 

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

Participant 

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

Program 

shall mean this Atlas Air Worldwide Holdings, Inc. Annual Incentive Program for Senior Executives, as it may be amended from time to time.

Program Year 

shall mean the calendar year.

Section 3.  Administration.

The Program shall be administered by the Committee.  The Committee shall have full power and authority in its sole discretion to construe and interpret the Program, establish and amend administrative regulations to further the purpose of the Program, determine the extent to 

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which Award payments have been earned by virtue of satisfying the financial goal described in Section 5.2, determine whether to reduce under Sections 5.2(b) through 5.2(e), to the extent that cost control, service reliability, management-business objectives and any other performance criteria have not been satisfied, the amount otherwise payable under Section 5.2, determine whether to settle a portion of the Award in Atlas stock and 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.

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 Year.  An individual who becomes an Eligible Employee during a Program Year but prior to September 30 of the applicable year will participate only with respect to Base Salary earned on and after the date he or she first becomes an Eligible Employee.  Any determination by the Committee to provide incentive compensation to an Eligible Employee other than as described in the preceding two sentences shall be treated as a separate award made outside the Program.

Section 5.  Section 5: Determination of Awards.

5.1.Maximum Bonus Award.  The maximum bonus payable under an Award for each Program Year 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: two-hundred percent (200%) of Base Salary for the Chief Executive Officer, one-hundred eighty percent (180%) of Base Salary for Executive Vice Presidents who also hold the title of President of Atlas Air, Inc. or Chief Executive Officer of Titan Aviation Holdings, Inc., and one-hundred and seventy percent (170%) of Base Salary for other Executive Vice Presidents.  

5.2.Performance Measures.  Payment under an Award is conditioned upon achievement of the threshold Financial Goal, as described below.  If the threshold Financial Goal is achieved, the Award payment will be the maximum bonus amount described in Section 5.1 minus such adjustments, if any, as the Committee determines to be appropriate to reflect levels of achievement with respect to the Financial Goal (if that Goal is achieved at a level below the maximum level) and/or one or more of the other factors described below and/or such other factors as shall be designated by the Committee.  

(a)Financial Goal.  The financial goal is based on Atlas's adjusted income from continuing operations, net of taxes (”Adjusted Income”) as reported in Atlas’s press release, as may be further provided in any exhibit to the Program.  For each Program Year, 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.  The Committee may also reduce maximum Award 

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payments, if any, to reflect the level of achievement of such service reliability factors as the Committee may determine for the Program Year.

(c)Management Business Objectives Adjustment.  The Committee may also reduce maximum Award payments, if any, to reflect the level of achievement of such individual management business objectives as the Committee may determine in the case of any Participant for the Program Year.

(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 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, 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 Year for which the Award is paid, unless in the period between the last day of the Program Year and any payout under the Program, the Participant is terminated by Atlas for Cause (as defined in Section 7) or the Participant terminates his employment with Atlas for any reason.  A Participant will receive an Award in the manner and at the times set forth in this Sections 6.

6.2.Time of Payment.  Any amount payable for an Award for a Program Year shall be paid by Atlas within two weeks following certification by the Committee as to achievement of the performance goals following the completion of the year-end audit for the applicable Program Year, but in no event later than March 15 of the year following the applicable Program Year.  

6.3.Form of Payment.  All amounts payable for an Award shall be paid in cash or Atlas stock, but Atlas stock may be used, if at all, only for the portion of the Award that exceeds fifty percent (50%) of Base Salary.  

6.4.Termination of Employment.  

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

(b)Death or Disability.  In the event of death or termination by the Company of the Participant’s employment with the Company or its Subsidiaries (a “Termination of Service”) by reason of the Participant’s Disability the Committee may, in its sole discretion, direct that all or a portion of a Participant's Award be paid, taking into account the duration of employment during the Program Year, the Participant's performance, and such other matters as the Committee shall deem appropriate.  For purposes of this Agreement, a termination of Service shall be deemed to be by reason of “Disability” if upon such Termination of Service, the Participant shall have been continuously disabled from performing the duties assigned to the Participant for a period of not less than six consecutive calendar months and such Disability shall be deemed to have commenced on the date following the end of such six consecutive calendar months.

(c)Retirement; Involuntary Termination; Good Reason.  If a Participant's employment terminates during a Program Year by reason of (i) an involuntary termination by Atlas not for Cause (as defined in Section 7 below), (ii) termination by the Participant for Good Reason (as defined below), or (iii) in the sole discretion of the Committee, normal retirement under a retirement program of Atlas, the Participant shall be entitled to receive a payment with respect to an Award for the Program Year in which such termination occurred, as if he or she had been employed by Atlas on the last day of such Program Year, in an amount equal to the lesser 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 Year  based upon actual company performance measured pursuant to the plan (and assuming for such purpose that 50% of his or her individual Management Business Objectives (“MBOs”) have been achieved), or (2) his or her Target Bonus Percentage.  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).  This Section 6.4 shall not apply to the extent the rights of a Participant in such circumstances are governed by another agreement.  "Good Reason" under this Section 6 shall mean (i) a material reduction in Participant’s duties and responsibilities from those of Participant's most recent position with Atlas, or (ii) a reduction of Participant’s aggregate salary, benefits and other compensation (other than bonus opportunity, which shall be paid as provided above) from that which the Participant was most recently entitled during employment with Atlas other than in connection with a reduction as part of a general reduction applicable to all participants in the Program.  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 Atlas undergoes a Change in Control, Awards will be determined and paid in accordance with this Section 7 based on the assumption that each of the Financial Goal, the Service Reliability Goal, the MBOs and any other Performance Criteria under Section 2 have 

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been achieved at a level of 100% of target for the Plan Year in which the Change in Control takes place pursuant to Section 5 of the Program; provided, however, if upon completion of the year-end audit for the applicable Program Year it is determined that the Financial Goal or any other Performance Criteria was achieved at a level higher than 100% of target, Awards will be correspondingly adjusted pursuant to Section 5 of the Program.   Notwithstanding the above, a Participant whose employment with Atlas terminates prior to the Change in Control shall forfeit such Award, unless such termination is by reason of (i) death, (ii) Disability (as defined in the Plan), (iii) normal retirement under a retirement program of Atlas, (iv) by Atlas not for Cause, or (v) by the Participant for Good Reason (as defined below).  For purposes of this Program, "Change in Control of Atlas” shall mean a “change in control event” (as that term is defined at Section 1.409A-3(i)(5) of the Treasury Regulations) with respect to the Company, which generally will include the following events, subject to such additional rules and requirements as may be set forth in the Treasury Regulations and related guidance:

 

	
 
	
(1)
	
A transfer or issuance of stock of the Company, where stock in the Company remains outstanding after the transaction, and one person, or more than one person acting as a group (as determined under the Treasury Regulations), acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of total fair market value or total voting power of the stock of the Company (however, if a person or group is considered to own more than 50% of the total fair market value or 30% of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group will not be considered a change in control for purposes of this Section 7);

	
 
	
(2)
	
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 ownership of stock possessing 30% or more of the total voting power of the Company (however, if a person or group is considered to control the Company within the meaning of this sentence (i.e. owns stock of the Company possessing 30% or more of the total voting power of the Company), then the acquisition of additional control will not be considered a change in control for purposes of this Section 7);

	
 
	
(3)
	
The replacement of a majority of members of the Company’s Board of Directors during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the appointment or election; or

	
 
	
(4)
	
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 the Company that have a total gross fair market value equal to more than 40% of the total gross fair market value of all the assets of the Company, as determined under the Treasury Regulations, or to an entity that is controlled by the shareholders of the Company immediately after the transfer, will not be considered a change in control for purposes of this Section 7).  For purposes of this Program, “Continuing Directors” shall mean the directors of Atlas on the date hereof and each other director, if such other director’s nomination for election to the Board of Directors of Atlas is recommended by a majority of the then Continuing Directors.  “Cause” shall mean (i) the 

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Participant’s refusal or failure (other than during periods of illness or Disability (as defined in the Plan)) 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.  "Good Reason" under this Section 7 shall mean the failure of the surviving entity in the Change in Control, of failure of an affiliate of the surviving entity, to continue the Participant in a position with the surviving entity or affiliate that (a) is not located within 40 miles of the location of such Participant's most recent principal location of employment with Atlas, (ii) does not involve substantially comparable duties and responsibilities as such Participant's most recent position with Atlas, or (iii) does not entitle the Participant to salary, benefits and other compensation (other than bonus opportunity, which shall be paid as provided above) that, in the aggregate, are substantially comparable or more favorable than those to which the Participant most recently was entitled during employment with Atlas.  This Section 7 shall not apply to the extent the rights of a Participant in such circumstances are governed by another agreement.

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 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.

Section 9.  General Provisions.

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9.1.Plan 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 9.3 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 Year in effect, the Committee reserves the right to amend, suspend, or terminate the Program at any time. 

 

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Section 11.   Awards Subject to Clawback

Pursuant to the Company’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 Committee 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. 

 

8aaww-ex103_652.htm

Exhibit 10.3

ATLAS AIR WORLDWIDE HOLDINGS, INC.
BENEFITS PROGRAM FOR SENIOR EXECUTIVES

Amended and Restated as of January 1, 2018

 

 

 

 

This document describes the Atlas Air Worldwide Holdings, Inc. (“Holdings”) Benefits Program for Senior Executives (the “Benefits Program”), under which individuals employed and elected as Executive Vice Presidents (or more senior offices) of Holdings and certain of its operating subsidiaries, including Atlas Air, Inc. ("Atlas"), Polar Air Cargo Worldwide, Inc. ("Polar") and Titan Aviation Leasing, Ltd. ("Titan") (such individuals are hereinafter referred to as "Executives") are eligible to participate.  This Benefits Program is effective as of January 1, 2018, and amends and restates the Atlas Air Worldwide Holdings, Inc. Benefits Program for Senior Executives dated January 1, 2015. 

Individuals employed and elected as Executive Vice Presidents (or more senior offices) by other subsidiaries of Holdings (Holdings collectively with Atlas, Polar and Titan, hereby defined as the "Company") may participate in this program only if expressly approved for such participation by the Compensation Committee of the Board of Directors of Holdings. 

All references in this document to the Compensation Committee or the Board of Directors refer to those bodies of Holdings. All references to the “Employer” are to the Company entity employing the Executive.

.I. Annual Salary.

Each Executive will receive a base annual salary ("Base Annual Salary") reviewed at least every other year for possible increases by the Compensation Committee. Included among other considerations in the annual review will be the Executive's individual job performance. Increases, if any, shall be at the discretion of the Compensation Committee.

II. Annual Bonus Plan.

Each Executive shall be eligible to participate in Holdings' Annual Incentive Plan or successor plan (the “Annual Incentive Plan”) at the Executive Vice President or higher level, as applicable. The Executive’s applicable annual bonus participation level will be set forth in the Annual Incentive Plan and will be awarded in consideration of individual and company performance based on performance goals and objectives determined by the Compensation Committee. A complete description of the effect of company and individual performance attainment on bonuses payable is described in the Annual Incentive Plan and any exhibits incorporated thereto (the “AIP Plan Document”). The AIP Plan Document is developed by the Compensation Committee and is subject to amendment from time to time with changes as adopted by the Compensation Committee or Board of Directors of Holdings, as applicable. Subject to the full language of the AIP Plan Document, attainment of company and individual performance in combination generally permits the Executive to earn a target bonus equal to at least 85% of Base Annual Salary for Executive Vice Presidents, 90% for Executive Vice Presidents of Holdings who also hold the title of President of Atlas or Chief Executive Officer of Titan and 100% for the Chief Executive Officer of Holdings and Atlas a may be adjusted upward by the Compensation Committee. Company or individual performance attainment at levels below the applicable goals set forth in the AIP Plan Document may cause bonus payments to be in lesser percentage amounts, as applicable, of Base Annual Salary or 

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result in no bonus being payable. Company and individual performance attainment at levels above the applicable goals may result in the bonus being greater percentage amounts as applicable, of Base Annual Salary. When the bonus payment reaches more than 85%, 90%, or 100%,as applicable, of Base Annual Salary, the Employer reserves the right to pay some or all of the portion of the bonus that is above 50% of Base Annual Salary in Holdings unrestricted common stock payable under the Atlas Air Worldwide Holdings, Inc. 2016 Incentive Plan, as may be amended or superseded, or any successor plan, subject to the terms and conditions of such plan and any applicable award agreement issued in connection with such award of unrestricted Holdings stock. Any bonus paid to Executive under the Annual Incentive Plan will be paid no later than two weeks following the completion of the year-end audit for the applicable performance year, but in no event later than March 15 of the year following the applicable performance year unless otherwise provided in the Annual Incentive Plan.

III.Health Benefits.

Each Executive and each Executive's eligible dependents shall be entitled to participate in the health insurance plan offered by the Employer, provided that the Executive and the Employer will each contribute to the Executive's monthly premium as provided by such plan, except following an Executive’s termination such Executive’s monthly premium charged under such plan shall be paid in the manner described in Section IV below, subject to the terms and conditions of the applicable health insurance plan. The Employer reserves the right to modify or discontinue any health insurance plan at any time with the understanding that the Employer will comply in full measure with all applicable state and federal laws relating to employer-provided health care coverage, including without limitation the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and the Patient Protection and Affordable Care Act of 2010, each as may be amended or superseded.

IV.Severance.

A. If an Executive's employment is terminated (i) by the Employer for reasons other than Cause (as defined below), or Permanent Disability (as defined below) or (ii) by the Executive for Good Reason (as defined below), and subject, in each case, to the Executive's execution of a release upon terms and conditions reasonably acceptable to the Employer and Executive (such acceptance not to be unreasonably withheld), which release must be presented to Executive, executed, no longer be subject to revocation, and become effective no later than the sixtieth (60th) day following the date of termination, then the Executive shall be entitled to: 

(i) receive a severance payment equal to twenty-four (24) months of the Executive's monthly Base Annual Salary, at the rate in effect on the date of termination, and except as otherwise required by Section XI below, all severance pay to which the Executive is entitled shall be in the form of salary continuation, payable in accordance with the normal payroll practices of the Employer for its executives (each such payment to be treated as a separate payment under Section 409A of the Internal Revenue Code), with the first payment, which shall be retroactive to the day immediately following the date the Executive's employment terminated, being due and payable on the later of the sixty-first (61st) day following the date of termination or the date specified in Section XI below (if applicable) (the "Lump-Sum Payment Date”); 

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(ii) provided Executive timely elects COBRA coverage for himself or herself and any eligible dependents and submits the applicable COBRA premium payments on a timely basis, reimbursement on an after-tax basis of the employer portion of COBRA premiums for a period of twelve (12) months from the date of termination; provided, however, that any such reimbursement shall cease in the event the Executive obtains comparable coverage in connection with subsequent employment or otherwise; and  

(iii) receive a payment with respect to an annual bonus award under the Annual Incentive Plan for the year in which such termination occurred, as if Executive had been employed by Employer on the last day of such year, in an amount equal to the lesser of (1) the amount Executive would have received if Executive were employed by Employer on the last day of the such year, based upon actual company performance measured in accordance with the applicable company performance goals set forth in the AIP Plan Document (and assuming for such purpose that “MBOs” (as defined in the AIP Plan Document) are attained at 100% (target) instead of a greater or lesser amount), or (2) Executive’s target bonus percentage.  Such payment shall be subject to all other terms and conditions of the AIP Plan Document under which the award was granted, including without limitation any provisions related to whether all required performance measures for the payment of an award have been satisfied and the provisions of the Annual Incentive Plan regarding the timing of payment of such award. 

The above benefits are in addition to an Executive's right to receive accrued but unused vacation pay through the date the employment period terminates, and all other benefits in which the Executive is vested pursuant to other plans and programs of the Company at the time of the Executive’s date of termination.

Upon the death of an Executive while severance payments are due to the Executive, the Executive's personal representative shall be entitled to the unpaid severance payments described in this Section IV.A and the Executive's spouse and eligible dependents, if any, shall be entitled to the health benefit coverage described in this Section IV.A, except that the remaining severance payments under this Section IV.A shall be made in a lump sum within (10) days immediately following the Company’s receipt of notice of Executive's death.  

In the event that any of the above benefits as described could reasonably result in adverse tax or legal consequences to the Company, the Company will provide in good faith a reasonable equivalent to the affected benefit(s).

B.If an Executive's employment is terminated by the Employer for Cause or if the Executive resigns for other than Good Reason, the Executive shall be entitled to receive only the Executive's accrued but unpaid Base Annual Salary and vacation as of the date of termination.

C."Good Reason" as used herein shall mean for any Executive subject to this Benefits Program, any of (i) a reduction in the Executive's Base Annual Salary from the Base Annual Salary the previous year, except where such reduction is part of a general salary reduction by the Employer, or the Executive ceasing to be eligible to earn an annual bonus under the Annual Incentive Plan, (ii) the Executive ceasing to hold the title of Executive Vice President, or Chief Executive Officer, as applicable other than through promotion or through reassignment to another job title of comparable responsibility, and 

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(iii) any reduction in job responsibilities which diminishes the opportunity for the Executive to earn the same bonus under the Annual Incentive Plan for which the Executive was previously eligible.

An Executive will be treated as having resigned for Good Reason only if he or she provides the Employer with a notice of termination within 90 days of the initial existence of one of the conditions described in the definition of Good Reason below, following which the Employer shall have 30 days from the receipt of the notice of termination to cure the event specified in the notice of termination and, if the Employer fails to so cure the event, the Executive must terminate his or her employment not later than thirty (30) days following the end of such cure period

D."Cause" as used herein shall mean (i) any act or acts of material dishonesty by the Executive, (ii) the failure of the Executive to comply with any of the Executive's material obligations to the Employer within ten (10) days of written notice from the Employer, (iii) any material violations by the Executive of the Employer’s policies as set forth in the Employer’s employee handbook, compliance manual, policies or programs, or related corporate policies, provided that, if such violation is subject to cure, the Executive shall have ten (10) days within which to cure such violation, or (iv) the conviction of or "no contest" plea by the Executive to any misdemeanor involving moral turpitude or any felony.

 

E.  "Permanent Disability" as used herein shall mean, in the Company’s sole determination, an Executive having been continuously disabled from performing the duties assigned to the Executive for a period of six (6) consecutive calendar months. Notwithstanding the foregoing, in the event that, as a result of an absence because of a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, the Executive incurs an earlier "separation from service" within the meaning of Section 409A of the Internal Revenue Code, as may be amended ("Section 409A"), the Executive shall on such date automatically be terminated from employment as a result of Permanent Disability. 

 

V. Change of Control.

	
 
	
A.
	
If, within the twelve-month period immediately following a Change of Control (defined below), the Executive's employment is terminated by the Employer for reasons other than Cause or if the Executive resigns for Good Reason, and subject to the Executive's execution of a general release upon terms and conditions consistent with this Agreement and acceptable to the Employer and the Executive (such acceptance not to be unreasonably withheld), which release must be presented to Executive upon or promptly after termination of the Executive's employment, fully executed, no longer subject to revocation, and become effective no later than the sixtieth (60th) day following the date on which the Executive's employment terminates, then the Executive shall be entitled to the compensation and benefit coverage set forth in Section IV.A above, except that the severance payments in Section IV.A shall be in the form of a single lump-sum payment payable on the Lump-Sum Payment Date in an amount equal to thirty six (36) months of the Executive Vice President's Base Annual Salary, as applicable.

	
 
	
B.
	
If, within the six-month period immediately following a termination of the 
	
 

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Executive's employment by the Employer for reasons other than Cause or by the Executive for Good Reason, a Change of Control occurs, then, in addition to the payment set forth in Section IV.A above (which shall be paid in the manner specified in Section IV.A above), and subject to satisfaction by the Executive of the release requirements of Section IV.A above,  the Executive shall receive a lump-sum payment on the Lump-Sum Payment Date equal to twelve (12) months (in the case of an Executive Vice President) of the Executive's Base Annual Salary, as applicable.
	
 

	
 
	
C.
	
For purposes of this Benefits Program, "Change in Control of the Company" means a "change in control event" (as that term is defined at Section 1.409A-3(i)(5) of the Treasury Regulations) with respect to the Company, which generally will include the following events, subject to such additional rules and requirements as may be set forth in the Treasury Regulations and related guidance:
	
 

(1) a transfer or issuance of stock of the Company, where stock in the Company remains outstanding after the transaction, and one person, or more than one person acting as a group (as determined under the Treasury Regulations), acquires ownership of stock in the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company (however, if a person or group is considered to own more than 50% of the total fair market value or 30% of the total voting power of the stock of the Company, the acquisition of additional stock by the same person or group will not be considered a “Change in Control of the Company”);

(2)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 ownership of stock possessing 30% or more of the total voting power of the Company (however, if a person or group is considered to control the Company within the meaning of this sentence (i.e., owns stock of the Company possessing 30% of the total voting power of the Company), then the acquisition of additional control will not be considered a “Change in Control of the Company”;

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

(4)the acquisition by a person or group, during the I2-month period ending on the date of the most recent acquisition by such person or group, of assets from the Company 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 the Company, as determined under the Treasury Regulations (however, a transfer of assets to certain related persons, as provided under the Treasury Regulations, or to an entity that is controlled by the shareholders of the Company immediately after the transfer, will not be considered a Change in Control of the Company”.

 

VI. Vacation.

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Each Executive shall be entitled to four weeks of paid vacation per year, prorated for partial years of employment.

	
VII.
	
    401(k) Plan, Annual Executive Physical and Other Benefits.

Each Executive shall be eligible to participate in the Employer's 401(k) plan and any other pension or welfare plan generally available from time to time to Executives or other employees of the Employer, the latter as determined by the Compensation Committee, as well as an annual executive physical as administered by the Benefits Department.

	
 
	
VIII.
	
Non-Competition

 

As a condition of employment and participation in this Benefits Program, each Executive shall execute a Non-Competition Agreement in a form approved by Holdings.  The release referred to in Sections IV and V as a condition to the payments and benefits set forth respectively therein also shall contain non-competition and other Company deemed appropriate restrictive covenants.

 

IX.Principal Residence

 

Each Executive shall be required to maintain his or her principal residence within reasonable commutable distance to the Purchase, New York area, except as may be otherwise expressly agreed in Section X, below, based upon Employer's specific business need.

 

X.Variations from Benefits Program

 

Any variation from the provisions of this Benefits Program (whether by separate employment agreement otherwise) shall be effective only if such variation is contained in a writing provided to the affected Executive and signed by the CEO, President, General Counsel or Chief Human Resources Officer of Holdings or of the Employer; any variation in writing so signed shall be binding on the affected Executive, provided, however, that no such modification or amendment after the date on which the Executive’s employment has been terminated for reasons other than Cause, due to Permanent Disability, death or for Good Reason or after the occurrence of a Change in Control shall adversely affect an Executive’s entitlement to severance benefits under Sections IV or V above.  Amendments to or restatements of this Benefits Program shall apply prospectively from the date of effectiveness; such amendments or restatements shall be binding on each Executive, provided, however, that no such modification or amendment after the date on which the Executive’s employment has been terminated for reasons other than Cause, due to Permanent Disability, death or for Good Reason or after the occurrence of a Change in Control shall adversely affect an Executive’s entitlement to severance benefits under Sections IV or V above.  Notwithstanding the foregoing, any amendments, restatements or variations to this Benefits Program must be approved by the Compensation Committee.

 

XI.Section 409A

 

Notwithstanding anything to the contrary in this Benefits Program, if at the time of an Executive's termination of employment, the Executive is a "specified 

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employee," as defined below, any and all amounts payable under this Benefits Program on account of such separation from service that constitute deferred compensation and would (but for this provision) be payable within six (6) months following the date of termination, shall instead be paid on the next business day following the expiration of such six (6) month period or, if earlier, upon the Executive's death; except (A) to the extent of amounts that do not constitute a deferral of compensation within the meaning of Treasury regulation Section 1.409A-1(b) (including without limitation by reason of the safe harbor set forth in Section 1.409A-1(b)(9)(iii), as determined by the Company in its reasonable good faith discretion); (B) benefits that qualify as excepted welfare benefits pursuant to Treasury regulation Section 1.409A-1(a)(5); or (C) other amounts or benefits that are not subject to the requirements of Section 409A.

For purposes of this Benefits Program, all references to "termination of employment" and correlative phrases shall be construed to require a "separation from service" (as defined in Section 1.409A-1(h) of the Treasury regulations after giving effect to the presumptions contained therein), and the term "specified employee" means an individual determined by the Company to be a specified employee under Treasury regulation Section 1.409A-1(i).

Each payment made under this Benefits Program shall be treated as a separate payment and the right to a series of installment payments under this Benefits Program is to be treated as a right to a series of separate payments.

 

In no event shall the Company have any liability relating to the failure or alleged failure of any payment or benefit under this Benefits Program to comply with, or be exempt from, the requirements of Section 409A.

 

XII.Conflict with Benefits Program

 

In the event there is any conflict or inconsistency between the terms and conditions of this Benefits Program and those set forth in any employment agreement which an Executive may maintain with Holdings, Atlas, Polar or Titan, the terms and conditions of such employment agreement shall govern and control.

 

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