WBI HOLDINGS, INC EXECUTIVE INCENTIVE COMPENSATION PLAN

 

                                                                    Exhibit 10.4

 

                               WBI Holdings, Inc.

                      Executive Incentive Compensation Plan

 

 

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                                                                    Exhibit 10.4

 

                                WBI HOLDINGS, INC

 

                      EXECUTIVE INCENTIVE COMPENSATION PLAN

 

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I. PURPOSE

 

     The purpose of the Executive Incentive Compensation Plan (the "Plan") is to

provide an incentive for key executives of WBI Holdings, Inc. and any

subsidiaries participating in the Plan (the "Company") to focus their efforts on

the achievement of challenging and demanding corporate objectives. The Plan is

designed to reward successful corporate performance as measured against

specified performance goals as well as exceptional individual performance. When

corporate 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. 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") 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.

 

 

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However, it is contemplated that such target modifications will be necessary

only in years of unusually adverse or favorable external conditions.

 

III. 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.

 

IV. ELIGIBILITY

 

     Executives who are determined by the Committee to have a key role in both

the establishment and achievement of Company 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 to terminate any Participant's employment at any time, for any

reason or no reason in the Company's sole discretion, or confer upon any

Participant any right to continue in the employment of the Company. 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.

 

V. 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.

 

 

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     The performance measure reflective of shareholder's interest will be the

percentage attainment of corporate goals, as determined each year by the

Committee. This measure may be applied at the corporate level for individuals,

such as the Chief Executive Officer, or at the business unit level for

individuals whose major or sole impact is on business unit 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 and business unit. 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.

 

VI. 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 business unit's objectives.

An exhibit showing the target awards as a percentage of Salary for eligible

positions will be attached to this Plan at the beginning of each Plan Year.

 

VII. 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.

 

     At the close of each Plan Year, the Company will prepare an analysis

showing the Company's or business unit'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.

 

 

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VIII. INDIVIDUAL AWARD DETERMINATION

 

     Each individual Participant's award will be based first upon the level of

performance achieved by the Company and secondly based upon the individual's

performance. The criteria applicable for assessing individual performance will

be established at the beginning of each 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 business unit performance.

 

IX. 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 business unit for the entire Plan Year. If a

Participant terminates employment with MDU Resources Group, Inc. 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 of the Company pursuant to a similar subsidiary Bylaw provision) and

if the Participant's 65th birthday occurs during the Plan Year, determination of

whether the performance measures have been met will be made at the end of the

Plan 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.

 

     An individual Participant who transfers between the Company and business

units 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 when made will be in cash. Incentive awards may be deferred

if the appropriate elections have been executed prior to the end of the Plan

Year. Deferred amounts will accrue interest at a rate determined annually by the

Committee.

 

     In the event of a "Change in Control" (as defined by the Committee in its

Rules and Regulations) then any award deferred by each Participant shall become

immediately payable to the Participant in cash, together with accrued interest

thereon to the date of payment. In the

 

 

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event the Participant files suit to collect the Participant's deferred award

then 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.

 

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Plan adopted October 15, 1985

Plan amended November 4, 1986

Plan amended July 9, 1996, effective January 1, 1996

Plan amended November 8, 1996, effective January 1, 1997

Plan amended August 5, 1999, effective January 1, 1999

Plan amended November 8, 2001, effective January 1, 2001

Plan amended by Written Consent February 25, 2002, effective January 1, 2002

Plan amended by Written Consent November 17, 2003, effective January 1, 2003

Plan amended by Written Consent August 24, 2004, effective January 1, 2004, per

  Written Consent dated December 29, 2004

 

 

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                               WBI HOLDINGS, INC.

 

                      EXECUTIVE INCENTIVE COMPENSATION PLAN

 

                              RULES AND REGULATIONS

 

 

     The Board of Directors of WBI Holdings, Inc. (formerly known as Williston