Exhibit 10(a)
NORWEST CORPORATION
PERFORMANCE-BASED COMPENSATION POLICY
(as Amended and Restated Effective as of January 1, 1998)
1. Purpose. The purpose of the "Norwest Corporation Performance-Based
Compensation Policy" (the "Policy") is to establish one or more performance
goals for payment of incentive compensation other than stock options and the
maximum amount of such incentive compensation that may be paid to certain
executive officers. It is the intention of the Human Resources Committee the
("Committee") of the Board of Directors of the Corporation that incentive
compensation awarded to each Covered Executive Officer (as defined below)
be deductible by the Corporation for federal income tax purposes in
accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), any regulations promulgated thereunder, and ruling or advisory
opinions published by the Internal Revenue Service related thereto (the
"Regulations").
2. Covered Executive Officers. This Policy shall apply to any
individual (a "Covered Executive Officer") who, on the last day of a taxable
year is (a) the chief executive officer of the Corporation or is acting in
such capacity, or (b) is among the four highest compensated executive
officers (other than the chief executive officer) of the Corporation. Whether
an individual is the chief executive officer or among the four highest
compensated executive officers shall be determined pursuant to the executive
compensation disclosure rules under the Securities Exchange Act of 1934.
3. Incentive Compensation Award/Establishment of Performance Goals. An
incentive compensation award to a Covered Executive Officer may be paid in
the form of cash, stock, or restricted stock, or any combination thereof.
Payment of an incentive compensation award to a Covered Executive Officer
will be contingent upon the attainment of the performance goal or goals for
the Performance Period established for such Covered Executive Officer by the
Committee as provided herein. The Committee shall retain the discretion to
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reduce the incentive compenseation award payable to a Covered Executive Officer,
notwithstanding attainment of any performance goal.
The Committee shall establish in writing one or more performance goals
to be attained (which performance goals may be stated as alternative
performance goals) for a Performance Period for each Covered Executive
Officer on or before the latest date permitted under Section 162(m) of the Code
or the Regulations. Performance goals may be based on any one or more of the
following business criteria (as defined in paragraph 4 below) as the Committee
may select:
Earnings Per Share
Business Unit Net Earnings
Return on Realized Common Equity.
The maximum amount of an incentive compensation award for any
Performance Period to any Covered Executive Officer shall be a dollar
amount not to exceed eight-tenths of one percent (0.8%) of the Corporation's
Net Income (as defined below).
4. Definitions. For purposes of this Policy and for determining whether a
particular performance goal is attained, the following terms shall have the
meanings given them below:
(a) The term "Business Unit Net Earnings" shall mean the net
earnings of the business unit of the Corporation managed by a Covered
Executive Officer, as determined in accordance with generally accepted
accounting principles, adjusted in accordance with the Corporation's
management accounting practices and conventions in effect at the beginning of
the Performance Period, and as further adjusted in the same manner as provided
below for Net Income.
(b) The term "Earnings Per Share" shall mean the Corporation's
diluted earnings per share as reported in the Corporation's consolidated
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financial statements for the Performance Period, adjusted in the same manner as
provided below for Net Income.
(c) The term "Net Income" shall mean the Corporation's net
income for the applicable Performance Period as reported in the Corporation's
consolidated financial statements, adjusted to eliminate the effect of (1)
restatements of prior periods' financial results relating to an acquisition
accounted for as a pooling of interests; (2) losses resulting from
discontinued operations; (3) extraordinary gains or losses; (4) the
cumulative effect of changes in generally accepted accounting principles; an
curring gain or loss which is separately identified and quantified in the
Corporation's financial statements.
(d) The term "Performance Period" shall mean a calendar year,
commencing January 1 and ending December 31.
(e) The term "Return on Realized Common Equity" shall mean the
Net Income of the Corporation on an annualized basis less dividends accrued
on outstanding preferred stock, divided by the Corporation's average total
common equity excluding average accumulated comprehensive income as reported in
the Corporation's consolidated financial statements for the Performance Period.
5. Applicability of Certain Provisions of the Long-Term Incentive
Compensation Plan and the Employees' Deferred Compensation Plan to Incentive
Compensation Awards. An incentive compensation award paid in stock or
restricted stock pursuant to this Policy shall be governed by the provisions
(other than provisions with respect to the computation of such award) of the
Corporation's Long-Term Incentive Compensation Plan. Deferral of an incentive
compensation award paid in cash under this Policy shall be made pursuant to the
provisions of the Corporation's Employees' Deferred Compensation Plan.
6. Effective Date; Amendment and Termination. This Policy shall be
effective as of January 1, 1998; provided, however, that no incentive
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compensation award shall be paid pursuant to this Policy, unless this Policy
has been approved by the stockholders of the Corporation. The Committee may
at any time terminate, suspend, amend or modify this Policy except that
stockholder approval shall be required for any amendment or modification to
this Policy that, in the opinion of counsel, would be required by Section 162
(m) of the code or the Regulations.
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