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EXHIBIT 10-34
SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL
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DESIGN
- Gatekeeper: Net Income
- Threshold 80% of plan
- Combined/adjusted upon transaction close (matrix)
- Exclusive of transaction costs
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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PLAN DRIVERS AND WEIGHTINGS
- 35% ROE
- 35% Integration Success
- 10% Customer Satisfaction
- 10% Diversity
- 10% Safety
PAYOUT RANGE
- 0-200% of position target
- Payout based on plan driver performance, with a 0-125%
individual performance modifier
DELIVERY MECHANISM
- Cash
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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ROE: 35% WEIGHTING
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PERFORMANCE ACHIEVEMENT PAYOUT
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11.7% 50% THRESHOLD
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12.3% 100% TARGET (PLAN)
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13.0% 200% MAXIMUM
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All-Inclusive except for integration/restructuring charges and
unplanned legislative impact. Adjustments considered for equity
structure changes and unplanned accounting changes.
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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INTEGRATION SUCCESS 35% WEIGHTING
RANGE: 0-200%
Integration plan development and FY2000 execution such that FY2001 is
accretive, including:
- Milestone Reporting
- Employee Listening
- Monthly Tracking of Integration Costs
Periodic progress reports to the O&C Committee; year-end assessment
completed by the CEO and presented to the Committee.
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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CUSTOMER SATISFACTION: 10% WEIGHTING
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PERFORMANCE ACHIEVEMENT PAYOUT
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82% 50% THRESHOLD
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83% 100% TARGET (PLAN)
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86%* 200% MAXIMUM
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Objective represents % of residential customer survey respondents
scoring "satisfied" or better in ongoing surveys.
(Note: Commercial will be added in for FY2001.)
* Revised.
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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DIVERSITY: 10% WEIGHTING
MINORITY SPENDING: 50% OF THE DIVERSITY OBJECTIVE
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PERFORMANCE ACHIEVEMENT PAYOUT
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7% 50% THRESHOLD
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9% 100% TARGET (PLAN)
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11% 200% MAXIMUM
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Objective represents minority spending as a % of total procurement
spending.
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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DIVERSITY PLACEMENTS: 50% OF THE DIVERSITY OBJECTIVE
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MINORITIES WOMEN PAYOUT
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22 25 50% THRESHOLD
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25 28 100% TARGET (PLAN)
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28* 31* 200% MAXIMUM
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Objective represents % of minorities and women placements (including
new hires and promotions) in grades 6 to 10.
* Revised.
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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SAFETY: 10% WEIGHTING
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LOST WORK DAYS PAYOUT
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28 50% THRESHOLD
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24 100% TARGET (PLAN)
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20 200% MAXIMUM
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SHORT-TERM EXECUTIVE INCENTIVE PLAN
DESIGN PROPOSAL--CONTINUED
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POSITION TARGETS/RANGES
POSITION CURRENT MARKET PROPOSED
TARGET COMPARISON FY2000
TARGET/RANGE
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CEO 40% 75% 75%
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DIVISION 35-50% 50% 50%
PRESIDENTS
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EVPS AND 20-40% 28-55% 35-50%
SVPS
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VPS 10-35% 33-48% 30-40%
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