50 of the Top 250 law firms use our Products every day
THE NORTH AMERICAN COAL
CORPORATION
2009 ANNUAL INCENTIVE COMPENSATION PLAN
This Incentive
Compensation Plan (the “Plan”) offers a highly
attractive incentive compensation opportunity to senior managers of
The North American Coal Corporation (the “Company” or
“NA Coal”) and its subsidiaries (the
“Subsidiaries”) when specified performance objectives
under their control or influence are achieved. This is accomplished
through a structure containing the following elements:
|
|
•
|
|
Each Participant is assigned an
individual incentive target, stated as a percentage of their base
salary midpoint that establishes the target incentive compensation
Award they may receive under the Plan when performance objectives
are met.
|
|
|
|
|
|
|
|
•
|
|
The
individual target Award is allocated among the following
performance components:
|
|
|
•
|
|
North American Coal (NA Coal)
corporate performance.
|
|
|
|
|
|
|
|
•
|
|
Bellaire Corporation cash
flow.
|
|
|
|
|
|
|
|
•
|
|
Business unit results.
|
|
|
|
|
|
|
|
•
|
|
Individual achievement.
|
|
|
•
|
|
Percentage weightings are assigned
to each component, based on the Participant’s
accountabilities and their impact on each component.
|
|
|
|
|
|
|
|
•
|
|
One
or more performance objectives will be established at the beginning
of the Award Year for each performance component.
|
|
|
|
|
|
|
|
•
|
|
A
performance range, which defines the acceptable level of results,
from threshold to maximum, is created for each performance
objective.
|
|
|
|
|
|
|
|
•
|
|
A
payout range is defined, which provides for actual incentive Award
payments of up to 150 percent of the incentive target Award,
except to the extent the Committee elects to increase or decrease
the actual pool by up to 10 percent, as described
below.
|
|
|
|
|
|
|
|
•
|
|
A
performance/payout formula combines the two ranges into a matrix
that defines the level of incentive compensation payment that will
result from each level of performance.
|
|
|
|
|
|
|
|
•
|
|
After audited financials are
available, actual Awards will be calculated based on actual results
against the established objectives.
|
|
|
|
|
|
|
|
•
|
|
A
final individual performance adjustment may be made, within a range
of +10 percent of the calculated Award, based on a judgment of
the Participant’s overall performance.
|
|
|
|
|
|
|
|
•
|
|
All
Awards will be paid in cash, during the period from January
1 st through March 15
th
after the end of the
Award Term.
|
This Incentive
Compensation Plan allows management and the Committee to establish,
in advance, the performance expectations and related incentive
compensation potential that Plan Participants can expect for the
Award Year. At the end of the Award Year, the Plan focuses judgment
of the management team’s performance on predetermined
objectives that should produce fairness in the determination of
Awards.
1
Individual Incentive Targets
The primary
focus of the Plan is the individual incentive compensation target
Award. At the beginning of each Award Term, each Participant is
assigned a target Award, stated as a percentage of the mid-point of
base salary, which is payable under the Plan when all relevant
performance objectives are achieved. The Plan provides for payments
above or below the target Award to reflect acceptable variances
from performance objectives.
The following
four sets of performance goals apply for the 2009 Award
Term:
|
|
•
|
|
Corporate — one or two key measures of
overall financial success.
|
|
|
|
|
|
|
|
•
|
|
Bellaire Corporation
— measure of cash
flow (where applicable).
|
|
|
|
|
|
|
|
•
|
|
Business Unit
— one to three
goals, quantifiable or narrative goals that relate to the success
of the business unit or department.
|
|
|
|
|
|
|
|
•
|
|
Individual — four to eight quantifiable
or narrative goals reflecting the most important areas of
achievement expected from the participant.
|
Actual
performance results attained probably will not match the
established performance goals exactly. Therefore, the Plan is
designed to provide incentive compensation payouts of up to
150 percent of the target Award if actual results fall within
a predetermined range of acceptable performance.
The Award range
is defined as follows:
|
|
|
|
|
|
|
|
|
|
|
% of
|
|
|
|
Award Level
|
|
Target
|
|
Description
|
|
|
|
|
150
|
%
|
|
Highest level
of incentive paid.
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
Competitive
incentive opportunity for achieving all-important goals.
|
|
|
|
|
|
|
|
|
|
|
|
25% to 50%
|
|
Incentive paid
when results meet minimum acceptable standards.
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
%
|
|
Performance
does not merit incentive payment.
|
Participants’ potential incentive Awards
will be allocated between performance components based on their
individual impact on results. The allocations allow for Awards to
be earned based on the achievement of the performance objectives
over which each Participant has the most control. Weightings will
be stated as a percentage and total 100 percent for each
Partic
|
