M.S. CARRIERS, INC.
1993 INCENTIVE PLAN
GROUND RULES FOR MSC INCENTIVE PLAN
FOR DESIGNATED KEY EMPLOYEES
March 1, 1993
I. General Introduction
--------------------
A. The 1993 Incentive Plan is designed to be consistent
-------------------
with the M.S. Carriers Incentive Philosophy, (Appendix A)
and will be improved periodically as the needs of the
company change.
B. The incentive plan is desinged to (1) promote team-
work in all areas of the company, (2) get people to
look at the "big picture", and (3) focus those managers
and key employees able to affect the bottom line on
actual profitability results for the purpose of
improving shareholder value. The quarterly OR
will establish the amount of incentive a participant can
receive. The objective is to tie the management group
together as a team which will result in higher net
income to the company. Participants will focus on
activities which affect profitability (things
that matter) rather than just activities (things that
keep us busy but have little botton line value.)
C. Eligibility: All executive, middle management department heads
-----------
and other key employees approved by executive management
incentive bounus plan.
II. Description of Incentive Plan
-----------------------------
A. Participation Criteria: To participate, an employee must:
----------------------
1. Be assigned to a position selected by executive management.
2. Be designated a member of the plan for the full quarter.
3. If you are absent for an extended period of time, such as
a leave of absence or protracted illness, your bonus will
be prorated, provided you work sometime during the quarter.
You will receive a percent of the bonus equal to the number
of work days you were present during the quarter, divided
by the total work days in the quarter
4. If you reach age 65 and retire before the quarter is
completed, you will receive a bonus computed as in 3 above.
B. Mangers will be expected to hold monthly meetings with incentive
participants to discuss profitablity opportunities and to analyze
the quarterly results to identify ways improvements can be made.
C. The incentive plan system will be evaluated by executive
management each year so that improvements can be made to meet
the needs of the company through time.
D. The following scale will determine quarterly payout:
Operating % of Base Salary
Ratio Achieved Paid Incentive
-------------- ----------------
90.0% 4%
89.5% 6%
89.0% 12%
88.5% 15%
88.0% 18%
87.5% 21%
87.0% 24%
86.5% 27%
86.0% 30%
85.5% 33%
85.0% 36%
84.5% 39%
84.0% 40%
E. The projected incentive based on 1993 Plan for a participant
salary level of $30,000 is as follows:
Projected OR Projected
By Qtr. Incentive
------------ ---------
1 91.0% 0
2 86.1% 2,025
3 86.6% 1,800
4 87.3% 1,575
-----
5,400 (18% of base salary)
APPENDIX A
----------
M.S. CARRIERS' INCENTIVE PHILOSOPHY
-----------------------------------
. We will not allow external business or economic factors to
influence positively or negatively the company's incentive
plan. The incentive plan will be reviewed annually to reflect
realistic changing business conditions.
. We will emphasize to participants that payments earned from
the incentive plan will vary and should not become a factor
in establishing an individual's or family's standard of living.
. We will pay incentives to participants to reflect the groups'
impact on operating ratio so that everyone's efforts will be
focused toward failure cost elimination and continous improvement
in customer and employee satisfaction.