Exhibit 10(a)
LONG-TERM INCENTIVE COMPENSATION PLAN
(As amended effective July 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 or limited
liability company, a majority of the voting stock or
membership interests of which is directly or indirectly
owned by the Corporation, and any partnership or joint
venture designated by the Committee in which any such
corporation or limited liability company is a partner
or joint venturer.
(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 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.
(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 Shares 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 an
Award under the Plan. No Employee may be awarded in any calendar
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. 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 targets may be given
the same or different weighting in determining the amount
of an Award earned, and may relate to absolute performance
or relative 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 provisions 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 achievement of the maximum performance
target. The Committee may also establish that a portion
of a full or 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, 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 promptly 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 of 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 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 Corporation."
8. Stock Awards. Awards of Stock without restrictions may be made
according to terms and conditions established by the Committee.
9. Stock Options.
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, the laws of descent and distribution or by the
Participant designating a beneficiary in accordance
with this Section 9.1(e). During the lifetime of the
Participant, Options may be exercised only by the
Participant or by the Participant's legal
representative. The Participant may, by completing and
signing a written beneficiary designation form which is
delivered to and accepted by the Corporation, designate
a beneficiary to exercise and receive any outstanding
Options (and all outstanding Stock Appreciation Rights
granted in conjunction with Options) upon the
Participant's death. If at the time of the
Participant's death there is not on file a fully
effective beneficiary designation form, or if the
designated beneficiary did not survive the Participant,
the legal representative of the Participant's estate
shall have the right to exercise the Option.
(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 aggregate 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 calendar year shall not exceed $100,000.
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 outstanding 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
Options. If a Participant dies before exercising all
outstanding Options, the outstanding Options shall be
exercisable by the Participant's beneficiary determined
in accordance with Section 9.1(e).
(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. If a Participant dies before
exercising all outstanding Stock Appreciation Rights
granted in conjunction with Options, said outstanding
Stock Appreciation Rights shall be exercisable by the
Participant's beneficiary determined in accordance with
Section 9.1(e).
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 the 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
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. Except as otherwise set forth in
this Plan, 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 the
Participant or by the Participant's 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:
(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
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.
(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.