Exhibit 10(b)
LONG-TERM INCENTIVE COMPENSATION PLAN
(As amended effective April 28, 1998)
1. Purpose. The purpose of Norwest Corporation's Long-Term Incentive
Compensation Plan (the "Plan") is to motivate key employees to produce a
superior return to the stockholders of Norwest Corporation by offering them
an opportunity to participate in stockholder gains, by facilitating stock
ownership and by rewarding them for achieving a high level of corporate
financial performance. The Plan is also intended to facilitate recruiting and
retaining talented executives for key positions by providing an attractive
capital accumulation opportunity.
2. Definitions.
2.1 The following terms, whenever used in this Plan, shall have the
meanings set forth below:
(a) "Affiliate" means any corporation, a majority of the voting
stock or membership interests of which is directly or
indirectly owned by the Corporation, and any partnership
designated by the Committee in which any such corporation is a
partner.
(b) "Award" means a grant made under this Plan in the form of
Performance Shares, Restricted Stock, Stock Options,
Performance Units, Stock Appreciation Rights, or Stock.
(c) "Board" means the Board of Directors of the Corporation.
(d) "Committee" means a committee of at least three members of
the Board who are not eligible, and have not at any time
within one year prior to service on the Committee been
eligible, to receive any Award under the Plan or under any
other benefit plan of the Corporation or any of its Affiliates
entitling the participants therein to acquire stock, stock
options or stock appreciation rights of the Corporation or any
of its Affiliates.
(e) "Corporation" means Norwest Corporation.
(f) "Employee" means a regular salaried employee (including an
officer or director who is also an employee) of the
Corporation or an Affiliate.
(g) "Fair Market Value" as of any date means the average of the
highest and lowest price of a share of Stock as reported by
the consolidated tape of the New York Stock Exchange for
43
that date. If there are no Stock transactions reported for
said date, the determination of said average shall be made as
of the last immediately preceding date on which Stock
transactions were reported by said consolidated tape.
(h) "Incentive Stock Option" means any Option designated as such
and granted in accordance with the requirements of Section
422A of the Internal Revenue Code of 1986, as amended.
(i) "Non-Qualified Stock Option" means an Option other than an
Incentive Stock Option.
(j) "Option" means a right to purchase Stock.
(k) "Participant" means a person designated by the Committee to
receive an Award under the Plan who is an Employee at the time
of such designation.
(l) "Performance Cycle" means the period of time of not fewer
than two years nor more than five years as specified by the
Committee over which Performance Shares or Performance Units
are to be earned.
(m) "Performance Shares" means an Award made pursuant to Section 6
which entitles a Participant to receive Shares, their cash
equivalent or a combination thereof based on the achievement
of performance targets during a Performance Cycle.
(n) "Performance Units" means an Award made pursuant to Section 6
which entitles a Participant to receive cash, Stock or a
combination thereof based on the achievement of performance
targets during a Performance Cycle.
(o) "Plan" means this Long-Term Incentive Compensation Plan, as
amended from time to time.
(p) "Restricted Stock" means Stock granted under Section 7 that is
subject to restrictions imposed pursuant to said Section.
(q) "Retirement" means retirement which entitles a Participant to
a benefit under Section 6.1 or Section 6.2 of the Norwest
Corporation Pension Plan or under Section 4.1 or Section
4.2 of the Norwest Financial Pension Plan as said sections
may be amended from time to time.
(r) "Share" means a share of Stock.
(s) "Stock" means the common stock, $1-2/3 par value per share, of
the Corporation.
44
(t) "Stock Appreciation Right" means the right to receive a
payment in cash or in Stock or a combination thereof in an
amount equal to the excess of the Fair Market Value of the
Stock at the time of exercise over the Fair Market Value of
the Stock at the time of grant.
(u) "Successor" means the legal representative of the estate of a
deceased Participant or the person or persons who may acquire
the right to exercise an Option or to receive Shares
issuable in satisfaction of an Award, by bequest or
inheritance.
(v) "Term" means the period during which an Option or Stock
Appreciation Right may be exercised or the period during
which the restrictions placed on Restricted Stock are in
effect.
2.2 Gender and Number. Except when otherwise indicated by context,
reference to the masculine gender shall include, when used, the
feminine gender and any term used in the singular shall also include
the plural.
3. Administration. The Plan shall be administered by the Committee. Subject
to the provisions of the Plan, the Committee shall have exclusive power
to determine when and to whom Awards will be granted, the form of each
Award,the amount of each Award, and any other terms or conditions of
each Award. The Committee's interpretation of the Plan and of any Awards
made under the Plan shall be final and binding on all persons with an
interest therein. The Committee shall have the authority, subject to the
provisions of the Plan, to establish, adopt and revise rules and
regulations relating to the Plan as it may deem necessary or advisable
for the administration of the Plan.
4. Shares Available Under the Plan; Limitation on Awards. The maximum
number of Shares that may be issued under this Plan on and after April 28,
1998 (in addition to Shares which prior to April 28, 1998 were subject to
Awards) shall not exceed the sum of (i) the number of Shares available
for, but not yet subject to, an Award as of April 28, 1998, plus (ii)
37,000,000 Shares. These Shares may consist, in whole or in part, of
authorized but unissued Stock or treasury Stock not reserved for any
other purpose. Any Share subject to the terms and conditions of an
Award under this Plan which are forfeited or not issued because the
terms and conditions of the Award are not met or for which payment is
not made in Stock and any Shares which are used for full or partial
payment of the purchase price of Shares with respect to which an Option
is exercised may again be used for and Award under the Plan. No
Employee may be awarded in any calander year Options or Stock
Appreciation Rights covering an aggregate of more than 7,000,000 Shares.
5. Participation. Participation in the Plan shall be limited to key
Employees of the Corporation or an Affiliate selected by the Committee.
45
Participation is entirely at the discretion of the Committee, and is not
automatically continued after an initial period of participation.
6. Performance Shares and Performance Units. An Award of Performance
Shares or Performance Units under the Plan shall entitle the Participant to
future payments or Shares or a combination thereof based upon the
achievement of pre-established performance targets.
6.1 Amount of Award. The Committee shall establish a maximum amount
of a Participant's Award, which amount shall be denominated in
Shares in the case of Performance Shares or in dollars in the case
of Performance Units.
6.2 Communication of Award. Written notice of the maximum amount of a
Participant's Award and the Performance Cycle determined by the
Committee shall be given to a Participant as soon as practicable
after approval of the Award by the Committee.
6.3 Amount of Award Payable. The Committee shall establish maximum
and minimum performance targets to be achieved during the
applicable Performance Cycle. Performance targets established by
the Committee shall relate to corporate, group, unit or individual
performance and may be established in terms of earnings, growth in
earnings, ratios of earnings to equity or assets, or such other
measures or standards determined by the Committee. Multiple
performance targets may be used and the components of multiple
performance measured against other groups, units, individuals
or entities. Achievement of the maximum performance target shall
entitle the Participant to payment (subject to Section 6.5) at
the full or maximum amount specified with respect to the Award;
provided, however, that notwithstanding any other provision of this
Plan, in the case of an Award of Performance Shares the Committee in
its discretion may establish an upper limit on the amount payable
(whether in cash or Stock) as a result of the acievement or the
maximum amount of a Participant's Award will be paid (subject
to Section 6.5) for performance which exceeds the minimum
performance target but falls below the maximum performance
target applicable to such Award.
6.4 Adjustments. At any time prior to payment of a Performance
Share or Performance Unit Award, the Committee may adjust
previously established performance targets or other terms and
conditions to reflect events such as changes in law, regulation,
46
or accounting practice, or mergers, acquisitions or divestitures.
6.5 Payment of Awards. Following the conclusion of each Performance
Cycle, the Committee shall determine the extent to which performance
targets have been attained, and the satisfaction of any other terms
and conditions with respect to an Award relating to such Performance
Cycle. The Committee shall determine what, if any, payment is due
with respect to an Award and whether such payment shall be made in
cash, Stock or some combination. Payment shall be made in a lump
sum or installments, as determined by the Committee, commencing as
practicable following the end of the applicable Performance Cycle,
subject to such terms and conditions and in such form as may be
prescribed by the Committee. Payment in Stock may be in Restricted
stock.
6.6 Termination of Employment. If a Participant ceases to be an
Employee before the end of a Performance Cycle by reason of his
death, permanent disability or Retirement, the Performance Cycle for
such Participant for the purpose of determining the amount of Award
payable shall end at the end of the calendar quarter immediately
preceding the date on which such Participant ceased to be an
Employee. The amount of an Award payable to a Participant to whom
the preceding sentence is applicable shall be paid at the end of
the Performance Cycle and shall be that fraction of the Award
computed pursuant to the preceding sentence the numerator of which
is the number of calendar quarters during the Performance Cycle
during all of which said Participant was an Employee and the
denominator or which is the number of full calendar quarters
in the Performance Cycle. Upon any other termination of
employment of a Participant during a Performance Cycle,
participation in the Plan shall cease and all outstanding Awards
of Performance shares or Performance Units to such Participant
shall be cancelled.
7. Restricted Stock Awards. An Award of Restricted Stock under the Plan
shall consist of Shares subject to restrictions on transfer, conditions
of forfeiture, and such other terms and conditions as the Committee
shall determine.
7.1 Agreements. An Award of Restricted Stock shall be evidenced by a
Restricted Stock agreement in such form and not inconsistent with
this Plan as the Committee shall approve from time to time, which
shall include the following terms and conditions:
(a) Restrictions. A statement of the terms, conditions, and
restrictions to which the Restricted Stock awarded is subject,
including, without limitation, terms requiring forfeiture and
47
imposing restriction on transfer for such Term or Terms as
shall be determined by the Committee. The Committee shall have
the authority to permit in its discretion an acceleration of
the expiration of the applicable Term with respect to any part
or all of the Restricted Stock awarded to a Participant.
(b) Lapse of Restrictions. A statement of the terms and any
other conditions upon which any restrictions upon Restricted
Stock awarded shall lapse, as determined by the Committee.
Upon the lapse of the restrictions, Shares free of
restrictive legend, if any, shall be issued to the Participant
or his Successor.
7.2 Nontransferability. Restricted Stock awarded, and the right to
vote such Restricted Stock and to receive dividends thereon, may
not be sold, assigned, transferred, exchanged, pledged, or
otherwise encumbered, during the Term applicable to the Award. A
Participant with a Restricted Stock Award shall have all the other
rights of a stockholder including, but not limited to, the right to
receive dividends and the right to vote the Shares.
7.3 Termination of Employment. If a Participant ceases to be an
Employee prior to the lapse of restrictions by reason of his death,
permanent disability or Retirement, all restrictions on Shares of
Restricted Stock held for his benefit shall immediately lapse.
Upon any other termination of employment prior to the lapse of
restrictions, participation in the Plan shall cease and all
Shares of Restricted Stock held for the benefit of a Participant
shall be forfeited by the Participant.
7.4 Certificates. Each certificate issued in respect to an Award of
Restricted Stock shall be deposited with the Corporation or its
designee and may, at the election of the Committee, bear the
following legend:
"This certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the
Long-Term Incentive Compensation Plan and an Agreement entered
into between the registered owner and Norwest Corporation.
Release from such terms and conditions shall obtain only in
accordance with the provisions of the Plan and Agreement, a copy
of each of which is on file in the office of the Secretary of
Norwest Coporation."
8. Stock Awards. Awards of Stock without restrictions may be made according
to terms and conditions established by the Committee.
9. Stock Options.
48
9.1 Agreements. An Award of an Option shall be evidenced by an
Option agreement in such form and not inconsistent with the
Plan as the Committee shall approve from time to time, which
shall include the following terms and conditions:
(a) Type of Option; Number of Shares. A statement identifying
the Option represented thereby as an Incentive Stock Option
or Non-Qualified Stock Option, as the case may be, and the
number of Shares to which the Option applies.
(b) Option Price. A statement of the purchase price of the
Stock subject to Option which shall not be less than the
Fair Market Value, and in any event not less than the par
value, of the Stock on the date the Option is granted.
(c) Exercise Term. A statement of the Term of each Option
granted as established by the Committee, provided that no
Option shall be exercisable after ten years from the date of
grant. The Committee shall have the authority to permit an
acceleration of previously established Terms, at its
discretion.
(d) Payment for Shares. A statement that the purchase price of
the Shares with respect to which an Option is exercised shall
be payable at the time of exercise in accordance with
procedures established by the Corporation. The purchase price
may be payable in cash, in Stock having a Fair Market Value on
the date the Option is exercised equal to the Option price of
the Stock being purchased pursuant to the Option, or a
combination thereof, as the Committee shall determine.
(e) Nontransferability. Each Option agreement shall state that
the Option is not transferable other than by will or the
laws of descent and distribution, and during the lifetime
of the Participant is exercisable only by him or by his
guardian or legal representative.
(f) Incentive Stock Options. In the case of an Incentive Stock
Option, each Option agreement shall be subject to any terms,
conditions and provisions as the Committee determines necessary
or desirable in order to qualify the Option as an Incentive
Stock Option (within the meaning of Section 422A of the
Internal Revenue Code of 1986, or any amendment or
regulation pertaining to it) or any other law or regulation
providing special tax treatment for stock options and related
stock. Provided, however, that the agggregate Fair Market
Value (as determined at the effective date of the grant) of
the Stock with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any
calander year shall no exceed $100,000.
49
9.2 Termination of Employment Due to Death, Disability, or Retirement.
(a) If a Participant ceases to be an Employee by reason of
his death, permanent disability or Retirement, all Options
outstanding shall become immediately exercisable and
remain exercisable to the extent and for such period or
periods determined by the Committee but not beyond the
expiration date of said Options.
(b) If a Participant ceases to be an Employee by reason of
his death, permanent disability or Retirement,
all outstanding Stock Appreciation Rights granted in
conjunction with Options shall become immediately
exercisable and remain exercisable to the extent and
for such period or periods determined by the Committee but
not beyond the expiration date of said Stock Appreciation
Rights.
9.3 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement. Except as otherwise determined by the
Committee, in the event a Participant ceases to be an Employee for
any reason other than his death, permanent disability or
Retirement, all rights of the Participant under this Plan shall
immediately terminate without notice of any kind.
10. Stock Appreciation Rights. An Award of a Stock Appreciation Right
shall entitle the Participant, subject to terms and conditions determined
by the Committee, to receive upon exercise of the right all or a portion
of the excess of (i) the Fair Market Value of a specified number of Shares
at the time of exercise over (ii) a specified price which shall not be
less than 100% of the Fair Market Value of the Shares at the time of
grant. Stock Appreciation Rights may be granted in connection with a
previously or contemporaneously granted Option, or independent of any
Option. If issued in connection with an Option, the Committee may impose a
condition that exercise of a Stock Appreciation Right cancels the Option
with which it is connected. A Stock Appreciation Right may not be
exercised at any time when the Fair Market Value of teh Shares of Stock to
which it relates does not exceed the exercise price of the Option
associated with those Shares.
10.1 Agreement. An Award of a Stock Appreciation Right shall be
evidenced by a Stock Appreciation Right agreement in such form
and not inconsistent with this Plan as the Committee shall
approve from time to time, which shall include a statement of the
Term within which the Stock Appreciation Right may be exercised
subject to terms and conditions prescribed by the Committee,
provided that no Stock Appreciation Right shall be exercisable
after ten years from the date of grant. The Committee shall have
50
the authority to permit an acceleration of previously established
exercise Terms.
10.2 Termination of Employment Due to Death, Disability, or Retirement.
If a Participant ceases to be an Employee by reason of his death,
permanent disability or Retirement, all Stock Appreciation Rights
then outstanding which were granted independent of any Option shall
become immediately exercisable and remain exercisable to the extent
and for such period or periods determined by the Committee but not
beyond the expiration date of said Stock Appreciation Rights.
10.3 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement. Except as otherwise determined by the
Committee, in the event a Participant ceases to be an Employee for
any reason other than his death, permanent disability or
Retirement, all rights of the Participant under this Plan shall
immediately terminate without notice of any kind.
10.4 Payment. Upon exercise of a Stock Appreciation Right, payment
shall be made in the form of cash or Stock or some combination
thereof as determined by the Committee. However, notwithstanding
any other provisions of this Plan, in no event may the payment
(whether in cash or Stock) upon exercise of a Stock Appreciation
Right exceed an amount equal to 100% of the Fair Market Value
of the Shares at the time of grant.
11. Nontransferability of Rights. No rights under any Award will be
transferable other than by will or the laws of descent and distribution,
and the rights and the benefits of any Award may be exercised and
received during the lifetime of the Participant only by him or his
guardian or legal representative.
12. Termination of Employment.
12.1 Transfers of employment between the Corporation and an Affiliate,
or between Affiliates, will not constitute termination of
employment for purposes of any Award.
12.2 The Committee may specify in the agreement relating to an Award
whether any authorized leave of absence or absence for military
or government service or for any other reasons will constitute a
termination of employment for purposes of the Award and the Plan.
13. Reorganization. If substantially all of the assets of the Corporation
are acquired by another corporation or in case of a reorganization of
the Corporation involving the acquisition of the Corporation by another
entity, then as to each Participant who is an Employee immediately prior
to the consummation of the transaction:
51
(a) All outstanding Options and Stock Appreciation Rights shall
become exercisable immediately prior to the consummation of the
transaction.
(b) All restrictions with respect to Restricted Stock shall lapse
immediately prior to the consummation of the transaction.
(c) All Performance Cycles for the purpose of determining the amounts
of Awards of Performance Shares and Performance Units payable shall
end at the end of the calendar quarter immediately preceding the
consummation of the transaction. The amount of an Award payable
shall be that fraction of the Award computed pursuant to the
preceding sentence the numerator of which is the number of
calendar quarters completed in the Performance Cycle through
the end of the calendar quarter immediately preceding the
consummation of the transaction and the denominator of which is the
number of full calendar quarters in the Performance Cycle. The
amount of an Award payable shall be paid within sixty days after
consummation of the transaction.
The Committee shall take such action as in their discretion may be necessary
or advisable to carry out the provisions of this Section.
14. Board Changes. On the date that a majority of the Board shall be
persons other than persons (a) for whose election proxies shall have
been solicited by the Board or (b) who are then serving as directors
appointed by the Board to fill vacancies on the Board caused by death
or resignation (but not by removal) or to fill newly-created directorships,
then as to any Participant who is an Employee immediately prior to said
date and who ceases to be an Employee within six months after said date
for any reason other than as a result of death, permanent disability or
Retirement:
(i) All outstanding Options and Stock Appreciation Rights shall
become immediately exercisable and may be exercised at any time
within six months after the Participant ceases to be an Employee.
(ii) All restrictions with respect to Restricted Stock shall lapse
and Shares free of restrictive legend shall be delivered to the
Participant.
(iii) All Performance Cycles for the purpose of determining the amounts
of Awards of Performance Shares and Performance Units payable shall
end at the end of the calendar quarter immediately preceding the
date on which said Participant ceased to be an Employee. The
amount of an Award payable to said Participant shall be that
fraction of the Award computed pursuant to the preceding sentence
the numerator of which is the number of calendar quarters during
the Performance Cycle during all of which said Participant was
52
an employee and the denominator of which is the number of full
calendar quarters in the Performance Cycle. The amount of an Award
payable shall be paid within sixty days after said Participant
ceases to be an Employee.
The Committee shall take such action as in their discretion may be
necessary or advisable to carry out the provisions of this Section.
15. Effective Date of the Plan.
15.1 Effective Date. The Plan shall become effective as of September
25, 1984 upon the approval and ratification of the Plan by the
affirmative vote of the holders of a majority of the outstanding
Shares of Stock present or represented and entitled to vote in
person or by proxy at a meeting of the stockholders of the
Corporation.
15.2 Duration of the Plan. The Plan shall remain in effect until all
Stock subject to it shall be distributed, until the Term of all
Options or Stock Appreciation Rights granted under this Plan
shall expire, until all restrictions on Restricted Stock granted
under this Plan shall lapse, or until the Performance Cycle for any
Performance Shares or Performance Units awarded under this Plan
shall end.
16. Right to Terminate Employment. Nothing in the Plan shall confer upon
any Participant the right to continue in the employment of the
Corporation or any Affiliate or affect any right which the Corporation or
any Affiliate may have to terminate employment of the Participant.
17. Withholding Taxes. The Corporation and its Affiliates shall have the
right to deduct from all payments under this Plan, whether in cash or
in Stock, an amount necessary to satisfy any federal, state or local
withholding tax requirements.
18. Deferral of Payments. The Corporation may, from time to time, establish
rules and conditions under which a Participant may defer the payment of
Awards. Such terms and conditions shall be included in a deferral
agreement signed by a Participant electing such deferral.
19. Amendment, Modification and Termination of the Plan. The Board or
Committee may at any time terminate, suspend or modify the Plan, except
that the Board or Committee will not, without authorization of the
stockholders of the Corporation, effect any change (other than through
adjustment for changes in capitalization as provided in Section 20)
which will:
(a) Increase the total amount of Stock which may be awarded under the
Plan.
53
(b) Change the class of Employees eligible to participate in the Plan.
(c) Withdraw the administration of the Plan from the Committee.
(d) Permit any person, while a member of the Committee, to be
eligible to participate in the Plan.
(e) Extend the duration of the Plan.
No termination, suspension, or modification of the Plan will adversely
affect any right acquired by any Participant or any Successor under an
Award granted before the date of termination, suspension, or modification,
unless otherwise agreed to by the Participant; but it will be
conclusively presumed that any adjustment for changes in capitalization
provided for in Section 20 does not adversely affect any right.
20. Adjustment for Changes in Capitalization. Any change in the number of
outstanding Shares occurring through Stock splits, reverse Stock splits,
or Stock dividends after the grant of an Award will be reflected
proportionately in the aggregate number of Shares then available for
Awards and in the number of Shares subject to Awards then outstanding;
and a proportionate change will be made in the per share Option price
as to any outstanding Options. Any fractional Shares resulting from
adjustments will be rounded to the nearest whole Share.
54