EXHIBIT 99.1
Con-way Inc.
Executive Incentive Compensation Plan
Effective January 1, 2007
Table of Contents
1. Purpose; EIP; Administration; Claims
2. Definitions
3. Eligibility
4. Establishment of Awards
5. Vesting
6. Amount of Award Payout
7. Payment of Award
8. Amendment; Termination
1. Purpose; EIP; Administration; Claims.
(a) Purpose. This Con-way Inc. Executive Incentive Compensation Plan
(the "EICP") is established and maintained to motivate Executives
effectively and efficiently. For each calendar year through 2006,
Con-way Inc. (f/k/a CNF Inc.) (the "Company") and its Affiliates
adopted several incentive compensation plans applicable to
Executives for different Business Units. For 2007 and future
calendar years, the Company and its Affiliates have instead
adopted this EICP which applies to and covers all Executives of
the Company and its Business Units.
(b) The EIP. Section 12 of the 2006 Equity and Incentive Plan (the
"EIP") authorizes the Committee to grant Awards pursuant to the
Annual Incentive Compensation Program in the form of Other Cash-
Based Awards, as deemed by the Committee to be consistent with the
purposes of the EIP. The EICP applies to Executives and, for
Executives, the EICP implements Section 12 of the EIP. The EICP
is subject to the applicable terms and provisions of the EIP, as
amended from time to time, including without limitation (i)
Section 3 (Administration), (ii) Section 4 (Eligibility), (iii)
Section 12 (Annual Incentive Compensation Program), (iv) Section
13 (Other Stock-Based or Cash-Based Awards), (v) Section 15
(Claims Procedures), and (vi) Section 16 (General Provisions), but
excluding Section 14 (Change in Control Provisions).
(c) Administration. The EICP is administered by the Committee,
pursuant to authority specified in Section 3 of the EIP.
(d) Claims. In the event that any person believes that she or he is
not receiving the full benefits to which she or he is entitled
under the EICP, such person may make a claim to the Plan
Administrator, and the claims procedures set forth in Section 15
of the EIP shall apply, with the Plan Administrator treated as the
Committee for purposes of applying such Section 15.
2. Definitions.
For Purposes of the EICP, the following terms shall be defined as set
forth below:
"Affiliate" is defined in Section 2 of the EIP and includes a Subsidiary
as defined in Section 2 of the EIP.
"Annual Compensation" means a Participant's annual base salary. Annual
Compensation does not include any other form of compensation, including,
for example, special bonus payments or any other special compensation,
payments under short and long term disability plans, in-service
withdrawals of deferred compensation, or any other compensation. To the
extent that a Participant elects to defer any portion of annual base
salary, Annual Compensation is computed without regard to such deferral.
For Participants who are designated as eligible to participate as of
January 1 of a calendar year, Annual Compensation is deemed to be their
annual base salary as of the first pay period following February 1 of
that year, unless a different date is selected by the Committee. For
Participants who first become eligible to commence participation after
the first pay period following February 1 of a calendar year, Annual
Compensation is deemed to be their annual base salary as of the first
pay period following the date the Participant becomes eligible to
participate in the EICP. For Participants who receive promotional pay
increases after the first pay period following February 1 of a calendar
year, Annual Compensation is adjusted as of the first pay period
following the date the Participant receives a promotional pay increase,
and the Participant's Award Payout shall be prorated to reflect her or
his Annual Compensation for the period prior to and subsequent to such
promotional pay increase.
"Award" is defined in Section 2 of the EIP.
"Award Payout" means the amount, if any, that is paid to a Participant
as determined pursuant to Section 6 of this EICP.
"Board" is defined in Section 2 of the EIP.
"Business Unit" is defined in Section 4(d) of the EICP for purposes of
the EICP. "Business Unit" is also defined in Section 2 of the EIP, but
that definition does not apply to the EICP.
"Committee" is defined in Section 2 of the EIP.
"Company" means Con-way Inc., a corporation organized under the laws of
the State of Delaware, or any successor corporation.
"EICP" means this Con-way Inc. Executive Incentive Compensation Plan.
"EIP" means the Con-way Inc. 2006 Equity and Incentive Plan, as amended
from time to time, or any successor plan.
"Employer" means the Company or any Affiliate of the Company that adopts
the EICP, whichever is the employer of the Participant.
"Executive" means an employee who occupies a position that has been
classified within the Con-way Inc. executive level salary grade
structure.
"ICP Pool" means, for each Business Unit, the maximum amount of
Incentive Profit that can be paid out for attainment of the Target
Payment Goal.
"Incentive Performance Goal" means a goal set by the Committee pursuant
to Section 4.
"Incentive Profit" means operating income computed on the basis of
generally accepted accounting principles (GAAP) in the United States,
but without adjustment for (i) loss or loss recovery, (ii) damage or
damage recovery, (iii) workers compensation, (iv) payouts under the
EICP, the EIP, or any other employee incentive plan (on a Business Unit
by Business Unit basis), (v) income tax, or (vi) except as otherwise
specified by the Committee with respect to a Business Unit, interest
income or expense. For clarity, Incentive Profit for Business Units
other than the Company and Con-way Enterprise Services, Inc. is based on
operating income prior to adjusting for any Award Payouts to be paid
pursuant to Section 6, and Incentive Profit for the Company and for Con-
way Enterprise Services, Inc. is based on consolidated pre-tax income of
the Company, after adjusting for any Award Payouts to be paid pursuant
to Section 6 to Participants employed by any other Business Units, but
prior to adjusting for any amounts to be paid pursuant to Section 6 to
Participants who are employed by the Company or by Con-way Enterprise
Services, Inc., and prior to adjusting for income tax. The Committee
reserves the right to determine what items are to be included in
Incentive Profit, including but not limited to whether significant
unusual items are to be taken into account in determining Incentive
Profit.
"Incentive Profit Goal" means the level of Incentive Profit that must be
achieved for funding the ICP Pool, as determined each year by the Plan
Administrator.
"Maximum Payment Goal" means the amount or percentage of an Incentive
Performance Goal that must be achieved to produce an Award Payout equal
to 200% of the Target Payment Goal.
"Participant" means an Executive designated by the Committee or its
delegate pursuant to Section 3 of the EICP. Participants are also
Grantees, as that term is defined in Section 2 of the EIP.
"Participation Factor" means the percentage of Annual Compensation
assigned to a Participant for purposes of this EICP, pursuant to Section
4.
"Plan Administrator" means the Committee or any person or persons to
whom the Committee delegates its authority or any portion thereof.
"Section 16 Officer" means an officer who is required to comply with
Section 16 of the Securities Exchange Act of 1934, as of the relevant
date specified in this EICP.
"Target Payment Goal" means the amount or percentage of an Incentive
Performance Goal that must be achieved to have an Award Payout equal to
a Participant's Annual Compensation times the Participant's
Participation Factor.
"Threshold Payment Goal" means the amount or percentage of an Incentive
Performance Goal that must be achieved in order to have the first dollar
of an Award Payout become payable.
3. Eligibility.
(a) Designation. The Committee shall designate the Executives
eligible to participate for a calendar year with respect to the
Company and each Business Unit or Affiliate, pursuant to Section 4
of the EIP, and may designate all Executives who are otherwise
eligible as of the beginning of the calendar year. The Committee
may delegate to the Company's Chief Executive Officer the
authority to designate as Participants Executive-level employees
who first become Executives, through hire or promotion, during a
calendar year, as provided herein. The Company shall maintain in
its records a list of Participants designated by the Committee, or
by the Chief Executive Officer, for each Business Unit for each
calendar year.
(b) Other Eligibility Requirements. Unless otherwise determined by the
Plan Administrator, Participants must be active full-time
Executive-level employees. Such Executives who are not designated
as eligible as of the beginning of the calendar year shall become
eligible to commence participation at the beginning of the first
full calendar quarter following the date on which they become
Executives. Calendar quarters begin January 1, April 1, July 1,
and October 1. An Executive who commences participation during a
calendar year, who participates less than four full quarters, and
who is otherwise eligible to receive a payment pursuant to Section
5 of this Plan, will receive a pro-rata payment based on the
number of full calendar quarters of participation.
4. Establishment of Awards.
(a) Incentive Performance Goals. For each calendar year, not later
than 90 days following the commencement of that year, the Plan
Administrator shall determine which Incentive Performance Goals
shall be used to fund the ICP Pool for Award Payouts to all
Participants, pursuant to Section 7, and shall establish one or
more Incentive Performance Goals for the Company's Chief Executive
Officer and each of the CEO's direct reports, and a percentage
goal weight for each assigned Incentive Performance Goal. The
Company's Chief Executive Officer shall establish such goals and
goal weights for all other Participants, whose Award Payouts, if
any, will also be subject to the Incentive Performance Goals
determined by the Plan Administrator as applicable for funding the
ICP Pool, pursuant to Section 7. Possible Incentive Performance
Goals may include:
* Incentive Profit
* other profit measures
* sales or revenues
* return on equity, assets, capital or investment
* earnings or book value per share
* operating or administrative expense in the absolute or as a
percent of revenue
* working capital
* accounts receivable goal
* days sales outstanding
* (gross) contribution margin
* safety (accidents)
* operational efficiency factors (e.g., shipments per paid claim,
dollars per paid claim, reship percentage, trailer efficiency,
fuel efficiency, etc.)
Each Incentive Performance Goal assigned to an Executive must be a
Performance Goal as defined in Section 2 of the EIP. In each
case, the Incentive Performance Goal may be determined with
respect to the Company or a Business Unit on a consolidated or
unconsolidated basis. The percentage goal weights for the
Incentive Performance Goals assigned to a Participant shall add to
100%.
(b) Participation Factor. Unless otherwise determined by the Plan
Administrator, each Participant's Participation Factor for each
calendar year shall be the Participation Factor applicable to
Executives in the executive level salary grade to which the
Participant is assigned at the time the Plan Administrator
establishes Incentive Performance Goals for the calendar year.
For Participants who are promoted during a calendar year to a
salary grade which has been assigned a higher Participation
Factor, such Participant's Award Payout shall be prorated based on
the number of weeks the relevant Participation Factor was
applicable to such Participant.
(c) Percentage Achievement. For each calendar year, for each Business
Unit, for each Incentive Performance Goal, the Plan Administrator
shall set a Threshold Payment Goal, a Target Payment Goal, and a
Maximum Payment Goal and may set intermediate levels and assign
intermediate percentage factors to such levels, with the Plan
Administrator setting the levels for the Incentive Profit Goal for
all Participants. If the achievement is at or below the Threshold
Payment Goal, the percentage achievement shall be zero. If the
achievement is between levels, the percentage achievement shall be
earned ratably, determined by straight line interpolation, for
accomplishment between the next lower level and the next higher
level. If the achievement is above the Maximum Payment Goal, the
percentage achievement shall equal 200%. In no event shall any
Participant's Award Payout exceed an amount equal to 200% of the
product of the Participant's Annual Compensation times the
Participant's Participation Factor. No Participant shall earn or
be entitled to any portion of her or his Individual Performance
Portion unless the Business Unit(s) on which her or his Award
Payout is based first exceed the Threshold Payment Goal.
(d) Business Unit. The Plan Administrator shall designate the Business
Units that will participate in the EICP for each calendar year.
Business Units may include (i) the Company, (ii) an Affiliate, and
(iii) a division of the Company or an Affiliate. The Plan
Administrator shall also designate, for the Company's Chief
Executive Officer and each of the CEO's direct reports, and for
each calendar year, whether such Participant's Award Payout is to
be based in whole or in part upon the performance of the Business
Unit in which the Participant is employed or another Business
Unit, and the Company's Chief Executive Officer shall make such
designations for all other Participants; provided, however, that
unless otherwise determined by the Committee at or prior to the
time the Award Payout would be made, no Award Payout in excess of
the amount that would comply with Section 162(m) of the Internal
Revenue Code shall be made to any Participant, but may be delayed
as provided in Section 7(f). The terms and conditions applicable
to Participants for a calendar year need not be identical, even
within Business Units.
(e) Transfers. If a Participant transfers from one Business Unit to
another during a calendar year, the Participant's Award Payout
shall be based on the pro-rated performance of the relevant
Business Units, based on the amount of time the Participant was
working for each Business Unit during the calendar year; provided,
however, that unless otherwise determined by the Committee at or
prior to the time the Award Payout would be made, no Award Payout
in excess of the amount that would comply with Section 162(m) of
the Internal Revenue Code shall be made to any Participant, but
may be delayed as provided in Section 7(f). A transfer shall be
considered to occur in the week the transfer is effective in the
relevant payroll records.
(f) Personal Data Sheets. As soon as practicable after the beginning
of each year, a personal data sheet will be prepared and delivered
to each Participant, providing the Participant relevant
information concerning the Participant's opportunity to earn an
Award Payout under the EICP for such calendar year. Following the
conclusion of the calendar year, but no later than the time the
Award Payment is made, a supplemental Personal Data Sheet will be
provided to each Participant, showing the Award Payout, if any,
for the applicable calendar year.
5. Vesting.
Subject to the following exceptions, no Participant shall receive any
payment under the EICP unless on the date that the payment is actually
made the Participant is then currently (i) employed by the Company or an
Affiliate and (ii) a Participant.
(a) Exception 1. A Participant who is employed by the Company or an
Affiliate through December 31 of a calendar year but leaves that
employment or otherwise becomes ineligible after December 31 but
before the sole or final payment is made relating to that calendar
year, as provided in Section 7, shall be entitled to receive an
Award Payout with respect to such calendar year, unless the
Participant is terminated for cause or cause is found to exist
before payment is made; provided, however, that the acts or
omissions that formed the basis for such cause occurred prior to
December 31 of the calendar year in which the Award Payout
otherwise became vested.
(b) Exception 2. A pro rata payment based on the number of weeks a
Participant was eligible to participate in the calendar year will
be made, as provided in Section 7, to (i) a Participant who
retires during the calendar year pursuant to the Con-way Pension
Plan or the provisions of the Social Security Act and who, at the
time of retirement, was a Participant, (ii) the heirs, legatees,
administrators or executors of a Participant who dies during the
calendar year and who, at the time of death, was a Participant,
(iii) a Participant who is placed on an approved leave during the
calendar year, in each case unless the Participant is terminated
for cause or cause is found to exist before payment; provided,
however, that the acts or omissions that formed the basis for such
cause occurred prior to December 31 of the calendar year in which
the Award Payout otherwise became vested.
In case of doubt, the Plan Administrator shall determine whether or not
cause exists, in its sole discretion, using whatever standard it deems
appropriate.
6. Amount of Award Payout.
(a) Award Payouts. Subject to the annual ICP Pool, as provided in
sub-section (b) below, a Participant's Award Payout for a calendar
year shall be equal to the product of, for each assigned Incentive
Performance Goal:
(i) the Participant's Annual Compensation, times
(ii) the Participant's Participation Factor, times
(iii)the percentage achievement of the Incentive Performance
Goals, times
(iv) the percentage goal weight for each Incentive Performance
Goal.
(b) ICP Pool. For each calendar year, the Plan Administrator will
establish an Incentive Profit Goal (and any other Incentive
Performance Goals that may be used) to fund an ICP Pool for each
Business Unit, the purpose of which shall be to establish the
maximum dollars that will be available for Award Payouts for all
Participants subject to each applicable ICP Pool, regardless of
any increase in the number of Participants during the calendar
year, including for purposes of this Section all employees
eligible to participate in any other annual incentive compensation
plan(s) adopted by such Business Unit, but excluding sales
commission plans. For purposes of establishing ICP Pools under
this Section, Business Unit shall not include the Company or Con-
way Enterprise Services, Inc. Unless otherwise determined by the
Plan Administrator, if the total Award Payouts for all
Participants in a Business Unit, including award payouts for all
participants in any other annual incentive compensation plans
established for the calendar year by the Business Unit, would
otherwise exceed the ICP Pool for that Business Unit, the Award
Payouts for Participants shall be reduced pro rata so that such
Award Payouts will not exceed the ICP Pool for that Business Unit.
No Award Payouts shall be earned or paid to a Participant until
the Business Unit that employs the Participant (or another
Business Unit, if the Participant's Award Payout is based on more
than one Business Unit pursuant to Section 4(d)) has achieved its
aggregate Threshold Payment Goal.
7. Payment of Award.
(a) No Partial Payment. Unless the Committee otherwise determines, in
its sole discretion, to authorize a partial payment of the
estimated total Award Payout with respect to a calendar year in or
prior to December of that calendar year, no payment of an Award
Payout or any portion thereof shall be made to any Participant
prior to completion of the annual audit of the Company's financial
statements for that calendar year by the Company's outside
auditors; provided, however, that Award Payouts shall be made to
Participants no later than March 15 of the following calendar
year.
(b) Final Payment. The final payment of the Award Payout with respect
to a calendar year, less any partial payment, if any, will be made
as soon as practicable following completion of the annual audit of
the Company's financial statements for that calendar year by the
Company's outside auditors, but in no event later than March 15 of
the following calendar year.
(c) Death. In the event of a Participant's death, the Award Payout
payable to the Participant for a calendar year shall be paid to
the Participant's Beneficiary. "Beneficiary" means the person or
persons designated by the Participant pursuant to a beneficiary
designation form properly completed and delivered to the Vice
President of Human Resources of the Company. If no such
beneficiary designation form is in effect, then the Beneficiary
shall be the Participant's estate.
(d) Adjustments. In the event that the Committee determines that (i)
the Award Payout payable to one or more Participants for a
calendar year has been or is likely to be materially affected as a
result of events or circumstances that were unanticipated at the
beginning of the calendar year and/or extraordinary in nature and
(ii) the goals of the EICP would be frustrated if adjustments were
not made to such Award Payouts, then the Committee, in its sole
discretion, may make such adjustments applicable to the
Performance Goals or to such Award Payouts as it deems
appropriate, which adjustments may have the effect of increasing
or decreasing the amount of the Award Payouts otherwise payable
pursuant to the EICP (subject to the prohibition of increases with
respect to covered employees imposed by Section 12 of the EIP).
(e) Clawback Provision. In the event that the financial statements of
the Company or a Business Unit are restated following the payment
of an Award and that restatement would have changed the Award
Payout, the following repayment terms apply to those officers who
were Section 16 Officers at the time the payment was made :
(i) In the event a financial statement restatement is required
within one year following a payment as a result of errors or
omissions, executives will be required to repay any amounts
that are deemed to have been overpaid based on that
restatement.
(ii) In the event a financial statement restatement is required at
any time as a result of fraudulent activities, executives
will be required to repay any amounts that are deemed to have
been overpaid based on that restatement for an unlimited
period of time.
(f) Section 162(m). If the Company anticipates that the deduction of
a payment made under the EICP would be limited or eliminated by
application of Section 162(m) of the Code, payment will be delayed
under the Company's 2005 Deferred Compensation Plan for
Executives, or any successor plan, until the earliest date at
which the Company reasonably anticipates that the deduction will
not be so limited or eliminated, or, if later, the date otherwise
elected by the Participant pursuant to the terms of such Deferred
Compensation Plan. It is the Company's intent that this
subsection will defer only the minimum amount required to avoid
any limitation on the deduction.
8. Amendment; Termination.
(a) Amendment. The Committee may amend the EICP at any time by notice
to the Participants, except that no amendment shall reduce the
award determined for a calendar year or portion thereof that has
ended before the date of the amendment.
(b) Termination. The EICP will automatically terminate when the EIP
expires or is terminated, and the Committee may terminate the EICP
at any earlier time. Notwithstanding the termination of the EICP,
the Award Payouts for each calendar year then in progress shall be
calculated, and be payable, following the completion of each such
calendar year, in accordance with the provisions of Sections 5 and
6.
Con-way Inc.
By:
Jennifer W. Pileggi
Senior Vice President, General Counsel
and Secretary
Con-way Inc.
Executive Incentive Compensation Plan
Executed: ___________________