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EXHIBIT
10.11
MidAmerican Energy Holdings Company
LONG-TERM
INCENTIVE PARTNERSHIP PLAN
As Amended and Restated January 1, 2007
PLAN DOCUMENT
MIDAMERICAN
ENERGY HOLDINGS COMPANY
LONG-TERM
INCENTIVE PARTNERSHIP PLAN
ARTICLE
I – PURPOSE AND
EFFECTIVE DATE
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1.1
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Purpose . The purpose of this Long-Term Incentive
Partnership Plan (the “Plan”) is to permit a select
group of management employees of MidAmerican Energy Holdings
Company and its subsidiaries to share in significant increases in
the value of the Company realized through the efforts of these
individuals. It is intended that the Plan, by providing this award
and deferral opportunity (U.S. only), will assist the Company in
retaining and attracting individuals of exceptional ability and
will act as an incentive to align their interests with those of the
Company. For purposes of Internal Revenue Code Section
409A, Incentive Accounts are considered to be part of a nonelective
account balance plan type and Deferral Accounts are considered to
be part of an elective account balance plan type.
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1.2
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Effective Date . The Plan was effective as of March 14,
2000, was subsequently restated as of January 1, 2003 and again
restated as of January 1, 2004, with the current restated Plan
effective January 1, 2007, (See Section 13.2 for good faith
compliance as to 409A Amounts during 2005, 2006, 2007 and
2008).
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ARTICLE
II – DEFINITIONS
For
the purpose of the Plan, the following terms shall have the
meanings indicated, unless the context clearly indicates
otherwise:
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2.1
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Base Salary . “Base Salary” means the annual
base salary rate payable to a Participant effective January 1 of
the calendar year for a particular Award Year. For purposes of the
Plan, Base Salary shall be calculated before reduction for any
amounts deferred by the Participant pursuant to the Company’s
tax qualified plans which may be maintained under Section 401(k) or
Section 125 of the Internal Revenue Code of 1986, as amended (the
“Code”), or pursuant to the MidAmerican Energy Holdings
Company Executive Voluntary Deferred Compensation Plan or any other
non-qualified plan which permits the voluntary deferral of
compensation. Inclusion of any forms of compensation other than
such “wages” and deferred “wages” is
subject to approval of the Chairman & CEO and the
President.
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2.2
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Beneficiary . “Beneficiary” means the person,
persons or entity, as designated by the Participant, entitled under
Article VIII to receive any Plan benefits payable after the
Participant’s death.
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2.3
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Board . “Board” means the Board of Directors of
the Company or any duly authorized committee.
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2.4
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Company . “Company” means MidAmerican Energy
Holdings Company, a Des Moines Iowa based corporation, and any
directly or indirectly affiliated subsidiary corporations, any
other affiliate designated by the Board, or any predecessor or
successor to the business of any thereof. However, with
respect to all matters involving administration of the Plan,
including the authority to amend and terminate the Plan, Company
shall mean MidAmerican Energy Holdings Company. With
respect to the obligation to make payments to any Participant under
the Plan, Company shall mean MidAmerican Energy Holdings Company
and the Company who employs the Participant, but not any other
Company. For purposes of determining whether there has
been a Separation from Service with the Company, Company means all
entities with whom the Company would be considered a single
employer under Code Sections 414 (b) and (c).
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2.5
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Determination Date . “Determination Date” means
the last business day of each month.
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2.6
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Disability . “Disability” means a condition of a
Participant who by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12
months: (i) is unable to engage in any substantial gainful
activity; or (ii) is receiving income replacement benefits for a
period of not less than 3 months under a long term disability plan
covering employees of the Company.
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2.7
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Incentive Account(s) . “Incentive Account(s)”
means the account or accounts maintained on the books of the
Company with respect to each Incentive Award and used solely to
calculate the amount which may be payable to each Participant under
the Plan and shall not constitute a separate fund of assets.
Participants may have more than one Incentive Account maintained on
their behalf.
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2.8
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Incentive Award(s) . “Incentive Award(s)” means
the award determined and allocated under the terms of the Plan.
Each Incentive Award(s) shall be designated by the year to which
the award relates (the “Award Year”) even though the
value of the award may be determined and credited to a
Participant’s Incentive Account in a subsequent year. An
example: The Year 2007 Incentive Award may relate to the
performance of the Company over the calendar year 2007 (the Award
Year), even though the Incentive Award will only be determinable in
2008.
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2.9
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Interest . “Interest” means the amount credited
to each Participant’s Incentive Account(s) on each
Determination Date. Prior to the start of each calendar
year, the Chief Financial Officer of the Company shall select a
range of asset allocation models from the Valuation
Funds. Participants shall then vote on which asset
allocation model shall be used for crediting Interest for the
calendar year for all Incentive Accounts of all
Participants. Such credits to a Participant’s
Incentive Account(s) may be either positive or negative to reflect
the increase or decrease in value of the Incentive Account(s) in
accordance with the provisions of this Plan.
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2.10
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Net Income . “Net Income” means the definition
as applied under Generally Accepted Accounting Principles. The
Chairman & CEO and the President may adjust Net Income for
extraordinary and non-recurring events, when
appropriate.
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2.11
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Nomination Committee . “Nomination Committee”
means a group of Participants appointed by the Chairman & CEO
and the President each plan year for the purposes of recommending
the Initial and Performance Allocations.
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2.12
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Participant . “Participant” means any employee
who is eligible, pursuant to Article III, below, to participate in
this Plan, and who has been so notified by the Chairman & CEO
and the President. Such employee shall remain a Participant in this
Plan for any award that has been made until such time as all
benefits payable for that specific Award Year have been paid in
accordance with the provisions hereof. A Participant may have an
Incentive Account(s) or a Deferred Account and not be chosen to
participate in a subsequent Award Year. Each Participant may be
referred to as either a “Partner” or an
“Associate”. Any such designation does not
convey any different or additional rights or responsibilities with
respect to a Participant and does not affect in any manner the
Participant’s employment status with the
Employer.
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2.13
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Plan . “Plan” means this Long-Term Incentive
Partnership Plan as amended from time to time.
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2.14
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Retirement and Retirement Age . “Retirement” for
purposes of Section 5.3 means the termination of employment with
the Company of the Participant after attaining age fifty-five (55)
and five (5) years of service. For all other purposes
under the Plan “Retirement” means termination of
employment with the Company after attaining age fifty-five (55) and
“Retirement Age” means age fifty-five
(55).
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2.15
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Separation from Service. “Separation from
Service” or “Separates from Service” means a
Participant’s termination of employment with the Company or
as otherwise defined in Applicable Guidance (See Section
7.1(a)).
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2.16
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Valuation Funds . “Valuation Funds” means one or
more of the independently established funds or indices that are
identified and listed in Exhibit A. These Valuation Funds are used
solely to calculate the Interest that is credited to each Incentive
Account(s) in accordance with Article V, and do not represent, nor
should they be interpreted to convey any beneficial interest on the
part of the Participant in any specific asset or other property of
the Company. The Chairman & CEO and the President shall select
the various Valuation Funds available under the Plan and shall set
forth a list of these Valuation Funds attached hereto as Exhibit A,
which may be amended from time to time at the discretion of the
Chairman & CEO and the President.
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2.17
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Vest or Vested . “Vest” or
“Vested” means deferred compensation which is not
subject to a Substantial Risk of Forfeiture (as defined in
Applicable Guidance) or to a requirement to perform further
services for the Employer.
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ARTICLE
III – ELIGIBILITY AND
PARTICIPATION
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3.1
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Eligibility . Eligibility to participate in the Plan shall
be limited to those select key employees of the Company who are
designated by the Chairman & CEO and the President from time to
time. The Chairman & CEO and the President of the Company shall
not be Participants in the Plan. The Chairman & CEO and the
President of the Company may designate certain Participants as
Associate Participants to reflect their contributions to the
success of the Company. All other Participants shall be considered
full Participants (“Partners”). An Associate
Participant may later be designated as a Partner.
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3.2
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Participation . An employee’s participation in the
Plan for any Award Year shall be effective upon notification to the
employee by the Chairman & CEO and the President.
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ARTICLE
IV – INCENTIVE
AWARD
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4.1
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Annual Award . Prior to the beginning of each Award Year,
the Chairman & CEO and the President shall determine whether an
Incentive Award shall be available for such Award Year. If an
Incentive Award is made available, the Chairman & CEO and the
President will establish the award categories based upon Net Income
target goals or such other criteria, as they deem appropriate for
the Award Year (including, but not limited to, safety,
environmental and risk management goals).
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4.2
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Allocation of Points . The total amount of the Incentive
Award (if the established goals are met for an Award Year) shall be
allocated among the eligible Participants based upon a maximum of
100,000 points allocated to Participants in the following
manner:
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a)
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Initial Point Allocation . The Nomination Committee shall
make recommendations to the Chairman & CEO and the President to
allocate initial points among participants for that year. The
Chairman & CEO and the President shall either accept these
recommendations or make adjustments that may increase, decrease or
eliminate any initial point allocation to any individual
Participant. Any points that are not allocated to Participants may
be either refunded to the Company or reallocated at a later date as
performance points at the discretion of the Chairman & CEO and
the President.
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b)
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Performance Point Allocation . Within sixty (60) days prior
to the end of the Award Year, the Nomination Committee shall make
recommendations to the Chairman & CEO and the President to
allocate all, or a portion of, the remaining points for the Award
Year, among the eligible Participants. The Chairman & CEO and
the President shall either accept these recommendations or make
adjustments that may increase, decrease or eliminate any such
remaining point allocation to any individual Participant. Any award
that is not allocated to Participants will be returned to the
Company as an offset to Plan expenses. The recommendation of the
Nomination Committee and the decision of the Chairman & CEO and
the President for allocation of points to a Participant based on
performance shall be based on subjective performance criteria where
the subjective performance criteria relate to the performance of
the individual Participant, a group of Participants that includes
the Participant, or a business unit for which the Participant
provides services.
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c)
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Value of a Point. The value of a point shall be
equal to the total Incentive Award (determined by the results of
Company performance as applied to the goals established for the
Award Year) divided by the total number of points
awarded.
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d)
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Maximum Allocation . Notwithstanding the above, the dollar
value of the sum of the initial and performance point allocations
made on behalf of any Participant for any single Award Year shall
not exceed one hundred fifty percent (150%) of that
Participant’s Base Salary for that Award Year, unless such
limit is waived by the Chairman & CEO and the President with
respect to a Participant.
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4.3
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Determination of Annual Awards . The dollar value of any
Incentive Award shall be determined by the Chairman & CEO and
the President as soon as practical after the close of the Award
Year, but in no event shall the dollar value of the Award be
determined later than March 1 st
of the year following the Award Year.
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4.4
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Reduction of Awards . The Chairman & CEO and the
President may, in their sole discretion, establish certain criteria
that must be met for an Incentive Award to be awarded in full.
These criteria may include the achievement of certain safety
performance goals, environmental, risk management or other goals
established by the Chairman & CEO and the President. The
determination of whether any applicable goals have been achieved
with respect to an Incentive Award shall be determined by the
Chairman & CEO and the President, as of the time that the
dollar value of that Incentive Award is determined in Section 4.3
above. If any such goal is not met, the Chairman &
CEO and the President may reduce the Incentive Award by an amount
as they determine in their sole discretion. In addition,
with respect to an individual Participant, if the Chairman &
CEO and the President, in their sole discretion, determine that the
Participant has not performed at a level during the Award Year
deemed sufficient to have contributed to the success of the
Company, the Participant’s point allocation may be
reduced.
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ARTICLE
V – INCENTIVE
ACCOUNT(S)
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5.1
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Accounts . The Company shall maintain a separate bookkeeping
account on behalf of each Participant in the Plan for each
Incentive Award. The value of any Incentive Award allocated to each
Participant plus any Interest earned thereon shall be added to such
Participant’s Incentive Account for the applicable Award
Year. Any distribution attributable to an Incentive Account shall
reduce the Incentive Account as of the date of
distribution. These Incentive Accounts shall be used
solely to calculate the amount payable to each Participant under
the Plan and shall not constitute a separate fund of
assets.
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5.2
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Timing of Credits . The value of a Participant’s share
of any Incentive Award for an Award Year shall be credited to a
Participant’s Incentive Account for such Award Year as of the
day determined by the Chairman & CEO and the President, but in
no event shall the date be later than March 1 st
of the year following the Award Year. Each Incentive Account shall
be increased or decreased by the Interest credited on each
Determination Date as though the balance of that Incentive Account
as of the date the Incentive Award is credited to a
Participant’s Incentive Account had been invested in the
applicable Valuation Funds chosen by the Investment Committee. Any
distributions to a Participant shall reduce the Participant’s
Incentive Account(s) as of the date of such
distribution.
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5.3
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Vesting of Accounts . Each Participant shall be twenty
percent (20%) Vested in his or her Incentive Account on December 31
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of the Award Year and an additional twenty percent (20%) on
December 31 of each subsequent year. Participants must
be employed on December 31 st
to Vest for the year. The Chairman & CEO and the
President may accelerate Vesting (but not accelerate payment), or
may establish criteria with respect to a Participant (in addition
to the passage of time) before Vesting will occur with respect to
any Incentive Award; provided, however, that any portion of an
Incentive Award that has already Vested with the passage of time
shall not be subject to any such additional vesting criteria, and
provided further that no additional vesting criteria shall postpone
the date of payment of the Incentive Award as provided under
Section 6.1. The Participant shall be considered to be
one hundred percent (100%) Vested in the event of termination of
service as a result of a Disability or death, and shall be
considered to be one hundred percent (100%) Vested in the event of
Retirement, but only with respect to Incentive Awards granted for
years prior to 2004.
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5.4
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Statement of Accounts . The Company shall give to each
Participant a statement showing the balances in the
Participant’s Incentive Account(s) no less frequently than on
an annual basis.
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ARTICLE
VI – PLAN
BENEFITS
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6.1
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Normal Benefit . The balance of each
Participant’s Incentive Account(s) shall be paid as soon as
administratively feasible following the end of the fourth year
following the Award Year, but in any event no later than two and
one-half (2 ½) months following the end of such fourth year.
Unless deferred pursuant to Section 6.3 below, such amount shall be
paid in a lump sum.
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6.2
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Early Termination Benefit . In the event that a
Participant Separates from Service with the Company prior to the
end of the fourth year following the end of an Award Year, the
Participant shall receive the Vested portion of the Incentive
Account(s) as of the most recent Determination Date preceding the
date of payment, payable in a lump sum; provided, however, that if
the Participant has a deferral election on file with respect to an
Incentive Account pursuant to Article VII, and incurs a Separation
from Service after reaching Retirement Age, payment of the Vested
amount of any Incentive Account shall be governed by Article VII
with respect to the deferral election made by the
Participant. If paid in a lump sum, the amount shall be
paid as soon as administratively feasible after the Separation from
Service, but in no event later than two and one-half (2 ½)
months following the date of Separation from Service. In addition,
the provisions of Section 7.2(A) shall apply to distributions under
this Section 6.2.
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6.3
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Deferred Benefit (U.S. only) . With respect to
any Incentive Award, the Participant may elect, in a manner
acceptable to the Company, to defer the receipt of all or a portion
of the value of the Incentive Account due under this Plan by filing
an election to do so within 90 (ninety) days after the beginning of
the Award Year relating to the Incentive Award to be deferred (and,
with respect to the 2008 and later Award Years, by filing an
election to defer before the beginning of the Award
Year).
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a)
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The
portion of the Incentive Account previously elected to be deferred
shall be transferred as of the last day of the fourth year
following the end of the Award Year to a Deferred Account (or as
soon as administratively feasible following Separation from Service
if an appropriate deferral election has previously been made) and
shall thereafter be subject to the terms and conditions of Article
VII herein (any portion not previously elected to be deferred shall
be paid pursuant to the provisions of Section 6.1
above);
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b)
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Such
an election shall comply with the provisions of Section 7.4(A) and
shall only permit the deferral of benefits otherwise payable under
Section 6.1 above, and the limited circumstance set forth in
Section 6.2 in the event of Retirement; and
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c)
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Such
an election shall completely satisfy and discharge all obligations
on the part of the Company to the Participant (and the
Participant’s Beneficiary) with respect to such Incentive
Account, and the Participant’s (and Participant’s
Beneficiary’s) rights under the Plan with respect to such
Incentive Account shall terminate and shall be governed by the
provisions of the Plan dealing with Deferred Accounts.
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An
example: A Participant may elect to defer the receipt of his
2008 Incentive Award by filing an election to do so prior to
December 31, 2007. If such election is in a form acceptable to
the Company, the balance of the Vested portion of the 2008
Incentive Account as of December 31, 2012, shall be
transferred to a Deferred Account for the Participant as of
that date.
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6.4
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Death Benefit . In the event of the death of a Participant
prior to payment of any Incentive Account(s), the
Participant’s Beneficiary shall receive the value of the
Incentive Account(s) determined as of the date of death. Such
amounts shall be paid in a lump sum as soon as administratively
feasible after the death of the Participant, but in no event later
than two and one-half (2 ½) months following the date of the
Participant’s death.
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6.5
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Withholding and Payroll Taxes . The Company that employs the
Participant at the time of payment shall withhold from any payment
made pursuant to the Plan, from an Incentive Account, any taxes
required to be withheld from such payments under law. A
Beneficiary, however, may elect not to have withholding of federal
income tax pursuant to Section 3405(a)(2) of the Code, or any
successor provision thereto (U.S. only). If
FICA/Medicare taxes are due with respect to all or a portion of an
Incentive Account prior to payment from the account, the
Participant shall make arrangements satisfactory to the Company for
payment of the Participant’s share of such taxes, which may
include withholding of such taxes from other regular pay of the
Participant.
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6.6
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Payment to Guardian . If a Plan benefit is payable to a
minor, a person declared incompetent or a person incapable of
handling the disposition of the property, the Company may direct
payment to the guardian, legal representative or person having the
care and custody of such minor or person. The Company may require
proof of incompetence, incapacity or guardianship, as it may deem
appropriate prior to distribution. Such distribution shall
completely discharge the
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