EXHIBIT 10.(B)
FLORIDA PROGRESS CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN
January 1, 1985
As Amended October 24, 1994
FLORIDA PROGRESS CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN
I. GENERAL PROVISIONS
1. PURPOSE The purpose of the Management Incentive Compensation Plan is
to benefit the shareholders and customers of the company by offering
annual award opportunities to management for their achievement of
financial and value added individual goals.
2. TERM OF THE PLAN The Plan shall be effective as of January 1, 1985.
The Plan shall remain in effect until such time as the Company's
Board of Directors elects to terminate the Plan.
II. DEFINITIONS
The following definitions shall be established within the Plan text, and
unless the Plan text indicates otherwise, shall have the meanings set
forth below:
1. "Base Salary Rate" shall mean the Participant's annual base salary on
April 1 of each Plan Year.
2. "Board" shall mean the Board of Directors of Florida Progress
Corporation.
3. "Chairman" shall mean the Chairman and Chief Executive Officer of the
Board of Directors of Florida Progress Corporation.
4. "Company" shall mean the Florida Progress Corporation and its
subsidiaries.
5. "Compensation Committee" shall mean the Compensation Committee of the
Board.
6. "Employee" shall mean a person who is a full-time, active employee of
the Company.
7. "Executive Optional Deferred Compensation Plan" shall mean the
Company's deferred compensation plan under which a Participant may
irrevocably elect to defer awards emanating from this Plan for
payment at a specified future date.
8. "Financial Goal(s)" shall mean the annual financial goal established
for the company or subsidiary.
9. "Individual Goals" shall mean the established annual performance
goals and objectives for each Plan Participant which will be used to
determine the Participant's Performance Award pursuant to the Plan.
10. "Participant" shall mean an Employee selected by Senior Management
who is eligible to receive a Performance Award pursuant to the Plan.
11. "Performance Award" shall mean the amount of the annual cash award
paid to the Plan Participant as soon as it is practical after
completion of the Plan Year.
12. "Plan" shall mean the Management Incentive Compensation Plan for the
company as described and set forth herein.
13. "Pool(s)" shall mean the total of annual Performance Awards which are
created and funded annually by achievement under Financial Goals for
the company and each subsidiary.
14. "Prorated Award" shall mean the amount of a Performance Award paid to
a Participant for participating in the Plan less than the full Plan
Year or change of Target Incentive.
15. "Subsidiary" shall mean any operating company or other corporate
entity which is affiliated with the Company and designated by the
Board to be included in the Plan.
16. "Supervisor" shall mean the immediate supervisor of a Plan
Participant to whom the latter reports on a day-to-day basis for
operational and administrative direction.
17. "Target Incentive" shall mean the percentage of annualized base
salary at risk by a participant for the 100% or full achievement of
the financial goal.
III. CHAIRMAN AND CHIEF EXECUTIVE OFFICER
1. The Chairman or designee of his choice, is vested with authority to
manage the day-to-day activities of the Plan. The Chairman shall
make recommendations to the Compensation Committee as to the
establishment of financial and individual goals for the Plan Year and
other administrative matters which may evolve pursuant to the Plan
from time to time. Specific authorities of the Chairman shall be to:
(a) Determine the eligible Employees who are designated
Participants.
(b) Prepare, review and recommend to the Compensation Committee the
performance awards for participants who are one and two
management levels removed from him.
(c) Review and recommend to the Compensation Committee the total
expenditures for all performance awards according to each
subsidiary and achievement of financial goals.
(d) Designate at his discretion an executive to administer the plan
within the company or any of its subsidiaries.
2. COMPENSATION COMMITTEE. The Compensation Committee shall have the
final authority with respect to all matters pursuant to the Plan.
Based upon recommendations submitted by the Chairman, the
Compensation Committee shall have the authority to:
(a) Review, and either accept, reject, or modify all of the annual
financial goals.
(b) Review, and either approve, reject, or modify the recommended
Performance Awards designated for the Chairman and participants
who are one, two and three levels removed from him.
(c) Revise, amend, or otherwise change in any manner the terms,
provisions, or other features of the Plan as the Compensation
Committee sees fit from time to time.
(d) Review, and either approve, reject or modify the total
expenditures for all performance awards according to each
subsidiary and achievement of financial goals.
IV. ELIGIBILITY AND PARTICIPATION
1. ELIGIBLE EMPLOYEES. Eligibility for participation in the Plan will
be limited to those Employees who as members of management have
responsibility for decision-making and actions which significantly
influence the Company's annual performance. The nomination of
Participants will be left to the discretion of the top officers of
each subsidiary for the approval of the Chairman.
2. NO RIGHT OF EMPLOYMENT. Nothing in the Plan shall infer any right of
an Employee to continue in the employ of the Company or shall
interfere with the right of the Company to terminate such Employee's
employment at any time.
V. PERFORMANCE MEASUREMENT PERIOD
The Plan measures and rewards performance achieved by the Company over the
course of the calendar year, which shall be designated as the Plan Year.
VI. PERFORMANCE CRITERIA
1. FINANCIAL GOALS. The Plan's performance criteria for funding awards
is established each year consistent with the Company's annual
financial goals and objectives.
2. WEIGHTING OF FINANCIAL GOALS. Florida Progress Corporation and each
Subsidiary will have its financial goals weighted to reflect their
relative importance in determining the size of the award pool. The
weighting of the financial goals by organizational entity shall be as
set forth below:
ORGANIZATIONAL ENTITY WEIGHTING OF FINANCIAL GOALS
--------------------- ----------------------------
Florida Progress Corporation 75% Florida Power
25% Diversified Consolidated
Subsidiary Companies 100% Subsidiary Company
VII. DETERMINATION OF INDIVIDUAL PERFORMANCE AWARDS
1. THE SIZE OF INDIVIDUAL PERFORMANCE AWARDS. Shall be based upon the
assessment of the participant's achievement under Individual Goals
during the Plan Year. All Awards are distributed from available
funds in the Incentive Award Pools.
2. TARGET AWARD OPPORTUNITIES. Each Participant will be assigned a
Target Incentive as determined by management to be commensurate with
the responsibility and impact of their position on the Strategic,
Annual Profit Plan, and Operations Goals of the Company.
The range of participant Target Incentives shall be from 10% up to
50% of annualized base salary.
3. THE SIZE OF AN INCENTIVE AWARD POOL. Shall be determined by the
achievement under the Financial Goal. At 100% Achievement the size
of the Incentive Award Pool shall equal the TOTAL of the Participant
Target Incentives. At the Threshold achievement level the size of
the pool shall be 50% of the TOTAL, and at the Maximum achievement
level equal to 150% of the TOTAL. Incentive Award Pools are
established separately under each Financial Goal and funds are not
transferrable between Pools.
FINANCIAL GOAL ACHIEVEMENT
--------------------------
Threshold Goal Maximum
% of TOTAL
of Target 50% 100% 150%
Incentives
4. DEVELOPMENT OF INDIVIDUAL GOALS. During the first quarter of each
Plan Year, all Participants will develop Individual Goals which set
forth annual goals and objectives of the Participant. The annual
goals are to be developed as the result of discussions between the
Participant and Supervisor. These goals may be either quantitative
or qualitative and should be consistent with the company or
subsidiary, Strategic, Annual Profit Plan or Operations Goals for the
year.
5. MEASUREMENT AGAINST THE INDIVIDUAL PERFORMANCE PLAN. Following the
last quarter of the Plan Year, Management will assess the performance
and recommend a Performance Award based upon the achievement of each
participant.
6. FUNDS NOT ALLOCATED AS PERFORMANCE AWARDS. Any funds which are not
allocated to Participants shall be returned to the Company's
operating profits for the applicable Plan Year.
VIII. TIMING AND PAYMENT OF AWARDS
1. TIMING OF AWARD PAYMENTS. Subject to deferrals pursuant to Sections 3
and 4, Participants in the Plan will receive their Performance Awards
as soon as practical after the completion of the Plan Year in
accordance with Section 2.
2. AWARDS PAYABLE IN CASH. All awards under the Plan shall be paid in
cash. All awards shall be subject to the Company withholding the
amount of any Social Security, federal, state, or local taxes
attributed to any amounts paid pursuant to the Plan.
3. DEFERRAL OF AWARDS UNDER THE EXECUTIVE OPTIONAL DEFERRED COMPENSATION
PLAN. Any Participant in the Plan may elect to defer a portion or
all of an award pursuant to the Plan in accordance with the Executive
Optional Deferred Compensation Plan. The deferral of awards, an
election which a Participant may voluntarily make, shall be in
accordance with the terms and provisions of the Executive Optional
Deferred Compensation Plan. A Participant desiring to exercise the
deferral election pursuant to the Executive Optional Deferred
Compensation Plan shall notify the Company each year of his deferral
election. Such notice must be in writing, on a deferral election
form provided by the Company, and be delivered to the Company prior
to the beginning of each Plan Year. The Participant shall also
irrevocably specify on the deferral election the date upon which the
deferred award applicable to that year's deferral shall be paid.
4. MANDATORY DEFERRAL OF AWARDS TO PRESERVE THE COMPANY'S TAX DEDUCTION.
The Company shall defer paying any award, including an award
previously deferred by a Participant, to the extent that it would
otherwise be disallowable as a deduction under Section 162(m) of the
Internal Revenue Code, until such time as the payment will be allowed
as a deduction. Such deferral shall accrue interest in accordance
with the terms and provisions of the Executive Optional Deferred
Compensation Plan. In determining the extent that such payment would
be disallowable, all other remuneration to a Participant shall first
be taken into account for purposes of the limit imposed by Section
162(m).
IX. LIMITED PARTICIPATION DURING PLAN YEAR
An Employee who is a Participant in the Plan must be in the Company's
employ on the last day of the Plan Year in order to receive any awards
pursuant to the Plan. In the event that an Employee becomes a Participant
in the Plan for less than a full Plan Year, the following provisions shall
apply:
1. ELIGIBILITY DURING PLAN YEAR. An Employee who becomes eligible for
participation in the Plan due to initial employment, transfer, or
promotion during the Plan Year will be eligible to receive a Prorated
Award based upon the Participant's Target Incentive at the time of
induction. In no event, however, will Prorated Awards be made for
any employment period of time less than three months participation
during the Plan Year by the Participant. In order to be eligible for
a Prorated Award, the Participant must be an Employee on the last day
of the Plan Year. The size of the Prorated Award is determined by
multiplying the Performance Award which would have been earned by the
Participant for a full year's participation by the fraction of the
number of months of active service during the Plan Year, as
follows:
Prorated = Annual x Number of Months of Active
Award Performance Service During Plan Year
Award 12
2. TERMINATION OF EMPLOYMENT DUE TO RETIREMENT, DISABILITY OR DEATH. A
Plan Participant who is not an Employee on the last day of the Plan
year as a direct result of retirement, extended disability, or death
(in which case the rights would pass to the Participant's
beneficiary) will be eligible to receive a Prorated Award. The
Prorated Award will be determined by multiplying the Performance
Award which would have been earned by the Participant for a full
year's participation by the fraction of the number of months of
active service during the Plan Year, as set forth below:
Prorated = Annual x Number of Months of Active
Award Performance Service During Plan Year
Award 12
3. PRORATION OF TARGET INCENTIVES. In the event a participant's Target
Incentive changes during the year, the performance award shall be
determined as follows:
Former x Former x # of + New x New x # of
Base Target Months Base Target Months
Salary Incentive 12 Salary Incentive 12
X. AMENDMENT TO PLAN
The Plan may be amended in whole or part by the Compensation Committee.
XI. CHOICE OF LAW
The validity, interpretation, and administration of the Plan and the
rights of any and all persons having or claiming to have an interest
therein, shall be determined exclusively in accordance with the laws of
the State of Florida.
XII. FORFEITURE
Participants in the Plan are expected to provide vision and leadership in
the strategic management of the company, exhibit the corporate
philosophies and maintain trusteeship of corporate culture. Significant
activity which by its nature, impedes the achievement of company goals or
damages the reputation of the company, shall result in the immediate
forfeiture of participation.