WBI HOLDINGS, INC.
EXECUTIVE INCENTIVE COMPENSATION
PLAN
____________________________________________________________
I.
PURPOSE
The purpose of the Executive
Incentive Compensation Plan (the "Plan") is to provide an incentive
for key executives of WBI Holdings, Inc. (the "Company") and any
subsidiaries participating in the Plan (each a "Subsidiary", and
together, the "Subsidiaries") to focus their efforts on the
achievement of challenging and demanding corporate
objectives. The Plan is designed to reward successful
corporate performance calculated from January 1 to December 31 of
each Plan Year, as measured against specified performance goals as
well as exceptional individual performance. When
corporate or subsidiary performance reaches or exceeds the
performance targets and individual performance is exemplary,
incentive compensation awards, in conjunction with salaries, will
provide a level of compensation which recognizes the skills and
efforts of the key executives.
II.
DEFINITIONS
Capitalized terms not otherwise defined herein
shall have the meanings given them in the Company’s Executive
Incentive Compensation Plan Rules and Regulations.
III.
BASIC PLAN CONCEPT
The Plan provides an opportunity to earn annual
incentive compensation based on the achievement of specified annual
performance objectives. A target incentive award for
each individual within the Plan is established based on the
position level and actual base salary, provided, however, that the
Compensation Committee of the Board of Directors (the "Committee")
of the Company in its sole discretion may, instead of actual
base
salary, use the assigned salary grade market
value (midpoint) ("Salary"). The target incentive award
represents the amount to be paid, subject to the achievement of the
performance objective targets established each year. Larger
incentive awards than target may be authorized when performance
exceeds targets; lesser or no amounts may be paid when performance
is below target.
It is recognized that during a Plan Year major
unforeseen changes in economic and environmental conditions or
other significant factors beyond the control of management may
substantially affect the ability of the Plan Participants to
achieve the specified performance goals. Therefore, in
its review of corporate performance the Committee, in consultation
with the Chief Executive Officer of MDU Resources Group, Inc., may
modify the performance targets. However, it is
contemplated that such target modifications will be necessary only
in years of unusually adverse or favorable external
conditions.
IV.
ADMINISTRATION
The Plan shall be administered by
the Committee with the assistance of the
President of the Company. The Committee shall approve
annually, prior to the beginning of each Plan Year, the list of
eligible Participants, and the target incentive award level for
each position within the Plan. The Plan's performance
targets for the year shall be approved by the Committee no later
than its regularly scheduled February meeting during that Plan
Year. The Committee shall have final discretion to
determine actual award payment levels, method of payment, and
whether or not payments shall be made for any Plan Year.
The Board of Directors of the
Company may, at any time and from time to time, alter, amend,
supersede or terminate the Plan in whole or in part, provided that
no termination, amendment or modification of the Plan shall
adversely affect in any material way an award that has met all
requirements for payment without
the written consent of the Participant holding
such award, unless such termination, modification or amendment is
required by applicable law.
V.
ELIGIBILITY
Key executives of the Company or the
Subsidiaries who are determined by the Committee to have a key role
in both the establishment and achievement of Company and/or
Subsidiary objectives shall be eligible to participate in the
Plan.
Nothing in the Plan shall interfere
with or limit in any way the right of the Company or any Subsidiary
to terminate any Participant's employment at any time, for any
reason or no reason in the Company's or a Subsidiary's sole
discretion, or confer upon any Participant any right to continue in
the employment of the Company or any Subsidiary. No
executive shall have the right to be selected to receive an award
under the Plan, or, having been so selected, to be selected to
receive a future award.
VI.
PLAN PERFORMANCE MEASURES
Performance measures shall be established that
consider shareholder and customer interests. These
measures shall be evaluated annually based on achievement of
specified goals.
The performance measure reflective of
shareholders' interest will be the percentage attainment of
corporate goals, as determined each year by the
Committee. This measure may be applied at the Company
level for some individuals, such as the President, whose major or
sole impact is Company-wide, or at the Subsidiary level for
individuals whose major or sole impact is on Subsidiary
results.
Individual performance will be assessed based on
the achievement of annually established individual
objectives.
Threshold, target and maximum award levels will
be established annually for each performance measure. The
Committee
will retain the right to make all
interpretations as to the actual attainment of the desired results
and will determine whether any circumstances beyond the control of
management need to be considered.
VII.
TARGET INCENTIVE AWARDS
Target incentive awards will be
expressed as a percentage of each Participant's
Salary. These percentages shall vary by position and
reflect larger reward opportunity for positions having greater
effect on the establishment and accomplishment of the Company's or
a Subsidiary's objectives. A schedule showing the target
awards as a percentage of Salary for eligible positions will be
prepared by the Committee for each Plan Year.
VIII.
INCENTIVE FUND DETERMINATION
The target incentive fund is the sum
of the individual target incentive awards for all eligible
Participants. Once the incentive targets have been
determined by the Committee, a target incentive fund shall be
established and accrued ratably by the Company. The
incentive fund and accruals may be adjusted during the
year.
After the close of each Plan Year,
the Company will prepare an analysis showing the Company's and each
Subsidiary's performance in relation to each of the performance
measures employed. This will be provided to the
Committee for review and comparison to threshold, target and
maximum performance levels. In addition, any
recommendations of the President will be presented at this
time. The Committee will then determine the amount of
the target incentive fund earned.
IX.
INDIVIDUAL AWARD DETERMINATION
Each individual Participant's award
will be based first upon the level of performance achieved by the
Company and/or the
Subsidiary and secondly based upon the
individual's performance. The criteria applicable for
assessing individual performance will be approved by the Committee
no later than its regularly scheduled February meeting during the
Plan Year. The assessment by the Committee, after
consultation with the President, of achievement relative to the
established criteria, as determined by a percentage from
0 percent to 200 percent, will be applied to the Participant's
target incentive award which has been first adjusted for Company or
Subsidiary performance.
X.
PAYMENT OF AWARDS
Except as provided below or as otherwise
determined by the Committee, in order to receive an award under the
Plan, the Participant must remain in the employment of the Company
or the Subsidiary for the entire Service Year. If a
Participant terminates employment with the Company pursuant to
Section 5.01 of the Company's Bylaws which provides for mandatory
retirement for certain officers on their 65th birthday (or
terminates employment with a Subsidiary pursuant to a similar
Subsidiary Bylaw provision) and if the Participant's 65th birthday
occurs during the Service Year, determination of whether the
performance measures have been met will be made at the end of the
Service Year, and to the extent met, payment of the award will be
made to the Participant, prorated. Proration of awards
shall be based upon the number of full months elapsed from and
including January to and including the month in which the
Participant's 65th birthday occurs. The prorated award
shall be paid as soon as practicable in the year following the
Service Year, but in all events between January 1 and March
10.
A Participant who transfers between the Company
or a Subsidiary and another company in the MDU Resources Group,
Inc. system may receive a prorated award at the discretion of the
Committee.
Payments made under this Plan will not be
considered part of compensation for pension
purposes. Payments will be made in cash as soon as
practicable in the year following the Service Year, but in all
events between January 1 and March 10. Incentive awards
may be deferred if the appropriate elections have been executed
prior to the beginning of the Service Year. A deferral
election will be effective only for the incentive award earned in
the Service Year following the Plan Year in which the election is
made. Deferral elections may not be changed or revoked
after the Service Year begins. Deferred amounts shall be
subject to the terms of the Plan and the Rules and Regulations, as
amended, and, to the extent not inconsistent therewith, the
deferral election forms pursuant to which the amounts were
deferred. Deferred amounts will accrue interest at a
rate determined annually by the Committee and specified in the
Rules and Regulations.
In the event of a "Change in
Control" (as defined by the Committee in its Rules and
Regulations), any award deferred by a Participant shall become
immediately payable to the Participant in cash, together with
accrued interest thereon to the date of payment. In the
event the Participant files suit to collect the Participant's
deferred award, all of the court costs, other expenses of
litigation, and attorneys' fees shall be paid by the Company in the
event the Participant prevails upon any of the Participant's claims
for payment of a deferred award.
XI.
ACCOUNTING RESTATEMENTS
This Section XI shall apply only to
incentive awards granted to Participants in the Plan who are
employees of the Company. Notwithstanding anything in
the Plan or the Plan's Rules and Regulations to the contrary, if
the Company's audited financial statements are restated, the
Committee may, in accordance with the Company's Guidelines for
Repayment of Incentives Due to
Accounting Restatements , take such actions as it deems appropriate (in
its sole discretion) with respect to
(a) unpaid
incentive awards under the Plan (including incentive awards
relating to completed Plan Years, but with respect to which
payments have not yet been made or deferred) ("Outstanding Awards")
and
(b) prior
incentive awards that were paid (or deferred) within the 3 year
period preceding the restatement ("Prior Awards"), provided such
Prior Awards were not paid prior to the date the Plan was amended
to add this Section XI,
if the calculation of the amounts payable, paid
or deferred under such awards are, or would have been, directly
impacted by the restatement, including, without limitation, (i)
securing (or causing to be secured) repayment of some or all
payments made pursuant to (or deferrals relating to) Prior Awards,
(ii) making (or causing to be made) additional payments (or
crediting additional deferrals), (iii) reducing or otherwise
adjusting the amount payable pursuant to Outstanding Awards and/or
(iv) causing the forfeiture of Outstanding Awards. The
Committee may, in its sole discretion, take different
action
