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EXHIBIT 10.(a)
FLORIDA PROGRESS CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN
AMENDED AND RESTATED DECEMBER 14, 1999
ARTICLE 1. GENERAL PROVISIONS
1.1 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 other goals.
1.2 Term of the Plan The Plan, as amended and restated, shall be effective
as of January 1, 1999 (the "Effective Date"). The Plan shall remain in
effect until such time as the Company's Board of Directors elects to
terminate the Plan.
ARTICLE 2. 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:
2.1 "Base Salary Rate" shall mean the Participant's annual base salary in
effect as of December 31 of each Plan Year.
2.2 "Board" shall mean the Board of Directors of Florida Progress
Corporation.
2.3 "Chairman" shall mean the Chairman and Chief Executive Officer of
Florida Progress Corporation.
2.4 "Company" shall mean Florida Progress Corporation and its subsidiaries
which are approved for participation in the Plan by the Committee.
2.5 "Compensation Committee" or "Committee" shall mean the Compensation
Committee of the Board.
2.6 "Disability" shall have the meaning ascribed to such term in the
Participant's Company sponsored tax-qualified retirement plan, or if no
such plan exists, the following definition will apply.
Shall mean any physical or mental disability arising out of natural or
accidental causes, or both, which originate subsequent to the date of
this Plan which prevents the Participant from engaging in and
performing all of the duties assigned the Participant and such
Disability shall have been in existence for a period of at least six
months.
2.7 "Effective Date" means the date the Plan becomes effective, as set
forth in Section 1.2 herein.
2.8 "Employee" shall mean a person who is a regular full-time or regular
part-time active employee of Florida Progress Corporation or a
Subsidiary.
2.9 "Financial/Strategic Goal(s)" shall mean the annual goal(s) established
for the Company or Subsidiary.
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2.10 "Individual Goals" shall mean the established annual performance goals
and objectives for each Participant which will be used to determine the
Participant's Performance Award pursuant to the Plan.
2.11 "Participant" shall mean an Employee who is actively participating in
the Plan during any Plan Year.
2.12 "Performance Award" shall mean the amount of the cash award payable to
a Participant based on achievement of certain pre-established
performance goals during the applicable Plan Year.
2.13 "Plan" shall mean the Management Incentive Compensation Plan for the
Company as described and set forth herein.
2.14 "Plan Year" shall mean a calendar year beginning on January 1 and
ending on December 31.
2.15 "Pool" shall mean the total Performance Awards which are created and
funded based on the achievement of the Financial/Strategic Goal(s) with
respect to either the Company or a particular Subsidiary.
2.16 "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, as provided in Article 9 hereof.
2.17 "Retirement" shall have the meaning ascribed to such term in the
Participant's Company sponsored tax-qualified retirement plan, or if no
such plan exists, under that company's retirement policy.
2.18 "Subsidiary" shall mean any operating company or any other corporate
entity or business unit thereof which is affiliated with the Company
and designated by the Board to be included in the Plan.
2.19 "Supervisor" shall mean the immediate supervisor of Participant to whom
the latter reports on a day-to-day basis for operational and
administrative direction.
2.19 "Target Incentive" shall mean the percentage of Base Salary Rate at
risk by a Participant for 100% or full achievement of the applicable
Financial/Strategic Goal(s).
ARTICLE 3. ADMINISTRATION
3.1 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 and subject to the terms of
the Plan, the Compensation Committee shall have the authority to:
(a) Review, and either accept, reject, or modify any or all of the
annual Financial/Strategic Goals;
(b) Review, and either approve or reject, or modify the recommended
Performance Awards designated for the Chairman and other
Officers who are included in the Plan;
(c) Subject to Article 13 hereof, 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 amount
of each Pool, and achievement of Financial/Strategic Goals;
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3.2 Chairman. As permitted by applicable law, and subject to the terms of
the Plan, 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/Strategic 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 all Officers who are included in the
Plan;
(c) Review and recommend to the Compensation Committee the total
expenditures for all Performance Awards according to each
Subsidiary, and achievement of Financial/Strategic Goals;
(d) Designate, at his discretion, an executive to administer the
Plan within the Company or any of its Subsidiaries; and
(e) Select Participants who shall be eligible to defer a
Performance Award with respect to any Plan Year pursuant to the
criteria set forth in Section 10.1 hereof.
(f) Determine the organization entity to which each Participant
should be assigned for purposes of establishing the weighting
as set forth in Article 6.2.
3.3 Chief Executive Officer. All other provisions of this Plan
notwithstanding the President and CEO of each participating Subsidiary
will have the authority to modify the amount of individual Performance
Awards within his or her subsidiary except for his own by plus or minus
ten percent (10%) of the proposed award.
ARTICLE 4. ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. An employee is eligible for participation in the Plan if
he or she is a regular full-time or regular part-time employee
(temporary employees are not eligible for participation) of the
Company; has completed three months of service prior to December 31 of
the Plan Year; is employed on December 31 of the Plan Year; continues
to be employed through the payout date and; as a member of management
has 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 President of each
Subsidiary with the approval of the Chairman.
4.2 No Right of Employment. Nothing in the Plan shall imply 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.
ARTICLE 5. PERFORMANCE MEASUREMENT PERIOD
The Plan measures and rewards performance achieved by the Company over the
course of the Plan Year.
ARTICLE 6. PERFORMANCE CRITERIA
6.1 Financial/Strategic Goals. The Plan's performance criteria for funding
Performance Awards shall be established each Plan Year by the
Compensation Committee consistent with the Company's annual
Financial/Strategic Goal(s) and objectives.
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6.2 Weighting of Financial/Strategic Goals. Each Financial/Strategic Goal
established with respect to Florida Progress Corporation and each
Subsidiary shall be weighted to reflect its relative importance in
determining the size of the Pool. For example, the weighting of the
1999 Financial/Strategic Goals by organizational entity is set forth
below:
Organizational Entity Weighting of Financial Goals
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Florida Progress Corp. 80% Florida Power
15% Electric Fuels
5% Corporate and Other
Subsidiary Companies 100% Subsidiary Company
ARTICLE 7. DETERMINATION OF INDIVIDUAL PERFORMANCE AWARD
7.1 Size of Individual Performance Awards. The size of individual
Performance Awards shall be based upon the achievement of
Financial/Strategic Goals and the assessment of the Participant's
achievement of Individual Goals during the Plan Year. All Performance
Awards are distributed from available funds in the applicable Pool(s).
7.2 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 Participants' target incentives shall be determined by the
Compensation Committee for all Officers and by the Vice President Human
Resources and the President of each subsidiary for all other
Participants.
7.3 Performance Award Pool. A Pool shall be established separately with
respect to the Company and each Subsidiary, and funds are not
transferable between Pools. The amount of each Pool shall be determined
based on the level of achievement of the applicable Financial/Strategic
Goal(s). At 100% achievement, the amount of the Pool shall equal the
TOTAL of the Participant's Target Incentive; at the Threshold
achievement level, and amount of the Pool shall be 50% of the TOTAL;
and at the Maximum achievement level, the amount of the Pool shall be
equal to 200% of the TOTAL. Results between achievement levels shall
produce interpolated funding levels.
7.4 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 Individual Goals
are to be developed as the result of discussions between the
Participant and Supervisor. These Individual Goals may be either
quantitative or qualitative and should be consistent with the Company
or Subsidiary, Strategic, Annual Profit Plan or Operations Goal for the
Plan Year.
7.5 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.
7.6 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.
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ARTICLE 8. TIMING AND PAYMENT OF AWARDS
8.1 Timing of Award Payments. Subject to deferrals made pursuant to
Articles 10 and 11 hereof, Participants in the Plan will receive their
Performance Awards, if any, as soon as practical after completion of
the Plan Year.
8.2 Awards Payable in Cash. All Performance Awards payable under the Plan
shall be paid in cash. All Performance Awards shall be subject to the
Company's obligation to withhold the required amount of any Social
Security, federal, state, or local taxes attributed to any amounts
payable pursuant to the Plan.
ARTICLE 9. LIMITED PARTICIPATION AND CHANGE IN TARGET INCENTIVE DURING PLAN YEAR
9.1 Partial Plan Year Eligibility. Subject to Section 9.2 hereof, a
Participant must be an Employee of the Company or a Subsidiary as of
the last day of the Plan Year and through the payout date in order to
be eligible to receive a Performance Award pursuant to the Plan. In the
event that an Employee is a Participant in the Plan for less than a
full Plan Year, the following provisions shall apply:
(a) 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.
(b) The size of the Prorated Award payable pursuant to Section
9.1(a) hereof shall be determined by multiplying the
Performance Award which would have been earned by the
Participant for a full Plan Year's participation by the
fraction that reflects 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 --------------------------
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9.2 Termination of Employment Due to Retirement, Disability, Death or
Change-In-Control Activities. A Plan Participant who is not an Employee
on the last day of the Plan Year as a direct result of Retirement,
Disability, death (in which case the rights would pass to the
Participant's beneficiary), or change-in-control activities will be
eligible to receive a Prorated Award. In no event, however, will a
Prorated Award be made for any employment period of less than three
months participation during the Plan Year by the Participant when the
termination of employment is due to change-in-control activities. 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 that reflects 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 --------------------------
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9.3 Proration of Target Incentives. In the event a Participant's Target
Incentive changes during the Plan Year, the Performance Award shall be
determined as follows:
12/31 x Former x No. of + 12/31 x New x No. of
------ Target Months ------ Target Months
Base Incentive --------- Base Incentive ------
Salary 12 Salary 12
Rate Rate
ARTICLE 10. DEFERRAL OPPORTUNITY
10.1 Eligibility. The Chairman, in his discretion, may permit any eligible
participant to defer all or a portion of his or her Performance Award
which may become payable under the terms of the Plan for any Plan Year.
It is the intent of the Company to extend eligibility to defer receipt
of Performance Awards only to those individuals who are deemed to
comprise a select group of management or highly compensated employees
such that the Plan will qualify for treatment as a "top hat" plan under
Employee Retirement Income Security Act of 1974 as amended from time to
time or any successor act thereto.
In the event a Participant no longer meets the eligibility requirements
for making deferrals of a Performance Award under the Plan, as
determined by the Chairman, such Participant shall become ineligible to
make further deferrals, retaining all the rights described in Articles
10 and 11 hereof, except the right to make any further deferrals, until
such time that the Participant again becomes eligible to make
deferrals.
10.2 Participation. The Chairman shall determine the Participants who are
eligible to make deferrals for any Plan Year pursuant to this Article
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who are deemed eligible to defer a Performance Award for any Plan Year
shall be so notified in writing.
10.3 No Right to Defer. No Participant shall have the right to be selected
to defer a Performance Award under this Article 10 nor, having been so
selected for any given Plan Year, to be selected for any other Plan
Year.
10.4 Amount Which May Be Deferred. An eligible participant may elect to
defer up to one hundred percent (100%) of his or her Performance Awards
which may be payable under the Plan for a given Plan Year prior to July
1 of that Plan Year. All deferral elections shall be irrevocable, and
shall be made on a "Performance Award Deferral Election Form," as
described herein.
10.5 Deferral Election. Eligible Participants shall make their elections to
defer the Performance Award which may become payable under the Plan for
a given Plan Year prior to July 1 of that Plan Year. All deferral
elections shall be irrevocable, and shall be made on a "Performance
Award Deferral Election Form," as described herein.
Eligible Participants shall make the following irrevocable elections on
each "Performance Award Deferral Election Form":
a) The percentage amount of the Performance Award to be deferred
for the Plan Year;
b) The length of the deferral period, pursuant to the terms of
Section 10.7 herein; and
c) The form of payment to be made to the Participant upon
Retirement, pursuant to the terms of Section 10.8 herein.
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10.6 Length of Deferral. The deferral period elected by each Participant for
any Plan Year shall be either (a) until the Participant's Retirement;
or (b) for a period at least equal to one (1) year following the end of
the Plan Year in which the Performance Award is earned and no greater
than ten (10) years following such date; provided, however, that each
Participant may have only one (1) deferral period under this Section
10.7(b) outstanding at any one time. Notwithstanding the foregoing, no
deferral period selected pursuant to Section 10.7(b) may extend beyond
a Participant's Retirement.
Notwithstanding the deferral periods elected by a Participant, payment
of deferred amounts and accumulated interest thereon shall be made to
the Participant in a single lump sum in the event the Participant's
employment with the Company terminates for any reason other than
Retirement at a time prior to full payment of deferred amounts and
interest thereon. Such payment following employment termination shall
be made in cash as soon as practicable following the termination of the
Participant's employment.
10.7 Payment of Deferred Amounts. Amounts together with interest earned
thereon, which are deferred to a date which occurs prior to a
Participant's Retirement shall be paid, in cash, in one lump sum as
soon as practicable following such date. With respect to amounts
deferred until Retirement, the Participant shall be entitled to elect
to receive payment of such deferred amounts, together with earnings
thereon, in cash, commencing upon the effective date of Retirement, in
a single lump sum or in installments.
a) Lump Sum Payment. Such payment shall be made in cash as soon as
practicable following the Participant's Retirement.
b) Installment Payments. Participants may elect payment of
deferred amounts in installments, with a minimum of two (2)
installments and a maximum of ten (10) installments. The
initial payment shall be made, in cash, as soon as practicable
following the effective date of the Participant's retirement.
The remaining installment payments shall be made, in cash,
during the first quarter of each Plan Year thereafter, until
the Participant's entire deferred compensation account has been
paid.
The amount of each installment payment shall be equal to the balance
remaining in the Participant's deferred compensation account
immediately prior to each such payment, multiplied by a fraction, the
numerator of which is one (1), and the denominator of which is the
number of installment payments remaining.
10.8 Financial Hardship. The Committee shall have the authority to alter the
timing or manner of payment of deferred amounts in the event that the
Participant establishes, to the satisfaction of the Committee, "severe
financial hardship." In such event, the Committee may, in its sole
discretion:
a) Authorize the cessation of deferrals by such Participant under
the Plan; or
b) Provide that all, or a portion, of the amount previously
deferred by the Participant shall immediately be paid in a lump
sum cash payment; or
c) Provide that all, or a portion, of the installments payable
over a period of time shall immediately be paid in a lump sum
cash payment; or
d) Provide for such other installment payment schedules as deemed
appropriate by the Committee under the circumstances.
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For purposes of this Section 10.8, "severe financial hardship" shall
mean any financial hardship resulting from extraordinary and
unforeseeable circumstances arising out of one of more recent events
beyond the control of the Participant. In any event, payment may not be
made to the extent such emergency is or may be relived: (i) through
reimbursement or compensation by insurance or otherwise; (ii) by
liquidation of the Participant's assets, to the extent the liquidation
of such assets would not itself cause severe financial hardship; and
(iii) by cessation of deferrals under the Plan.
Withdrawals of amounts because of severe financial hardship may only be
permitted to the extent reasonably necessary to satisfy the hardship.
Examples of what are not considered to be severe financial hardships
include the need to send a Participant's child to college or the desire
to purchase a home. The Participant's account will be credited with
interest in accordance with the Plan up to the date of distribution.
The severity of the financial hardship shall be judged by the
Committee. The Committee's decision with respect to the severity of
financial hardship and the manner in which, if at all, the
Participant's future deferral opportunities shall be ceased, and/or the
manner in which, if at all the payment of deferred amounts to the
Participant shall be altered or modified, shall be final, conclusive,
and not subject to appeal.
ARTICLE 11. PARTICIPANTS' ACCOUNTS
11.1 Participants' Accounts. The Company shall establish and maintain a book
reserve account for deferrals made by each Participant under Article 10
herein. Each account shall be credited as of the date the amount
deferred otherwise would have become due and payable to the
participant.
11.2 Earnings (Losses) on Deferred Amounts. Participants shall be credited
with earnings (and losses, if any) on their Accounts as if they had
been invested in one or more of the following investment funds offered
by Vanguard, as determined by the Participants:
Vanguard 500 Index Fund
Vanguard Extended Market Index Fund
Vanguard International Growth Fund
Vanguard Life Strategy Moderate Growth Fund
Vanguard Total Bond Market Index Fund
Vanguard Retirement Savings Trust
11.2(a) Participants may make a separate investment election to rebalance their
total account by exchanging existing fund account balances among the
investment funds offered within the Plan (in one percent (1%)
increments) on a daily basis;
11.2(b) Earnings (losses) shall be credited on a daily basis. Interest on
deferred amounts shall be paid out to Participants at the same time and
in the same manner as the underlying deferred amounts.
11.2(c) The provisions of this Article shall be administered and processed in
accordance with such rules and procedures as shall be adopted by the
Chairman or his delegate.
11.3 Charges Against Accounts. There shall be charged against each
Participant's deferred compensation account any payments made to the
Participant or to his or her beneficiary.
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ARTICLE 12. DESIGNATION OF BENEFICIARY
Each participant shall designate a beneficiary or beneficiaries who, upon the
Participant's death, will receive the amounts that otherwise would have been
paid to the Participant under the Plan. All designations shall be signed by the
Participant, and shall be in such form as prescribed by the Committee. Each
designation shall be effective as of the date delivered to the Vice President
Human Resources of the Company by the Participant.
Participants may change their designations of beneficiary on such form as
prescribed by the Vice President Human Resources of the Company. The payment of
amounts deferred under the Plan shall be in accordance with the last unrevoked
written designation of beneficiary that has been signed by the Participant and
delivered by the Participant to the Vice President Human Resources of the
Company prior to the Participant's death.
In the event that all the beneficiaries named by a Participant pursuant to this
Article 12 predecease the Participant, the amounts that would have been paid to
the Participant or the Participant's beneficiaries shall be paid in a lump sum
to the Participant's estate. In the event a Participant does not designate a
beneficiary, or for any reason such designation is ineffective, in whole or
part, the amounts that otherwise would have been paid to the Participant or the
Participant's beneficiaries under the Plan shall be paid to the Participant's
estate.
ARTICLE 13. AMENDMENT AND TERMINATION
The Committee, in its sole discretion, without notice, at any time and from time
to time may modify or amend, in whole or in part, any or all of the provisions
of the plan, or suspend or terminate the Plan entirely; provided however, that
no such modification, amendment, suspension or termination may, without the
consent of a Participant (or beneficiary, as applicable), materially and
adversely affect the right of a Participant (or beneficiary as applicable) to a
payment or distribution hereunder with respect to an outstanding Performance
Award or previously deferred amounts.
ARTICLE 14. MISCELLANEOUS
14.1 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan and the Plan shall be
construed and enforced as if the illegal or invalid provision had not
been included.
14.2 Costs of the Plan. All costs of administering the Plan shall be borne
by the Company out of the Company's general assets. Although not
prohibited from doing so, the Company is not required, in any way, to
segregate assets in any manner or to specifically fund any benefits
provided under this Plan.
14.3 Contractual Obligation. The Plan shall create a contractual obligation
on the part of the Company to make payments from the Participant's
accounts when due. Payment of account balances shall be made out of the
general funds of the Company.
14.4 Unsecured Interest. No Participant or party claiming an interest in
deferred amounts under a Participant shall have any interest whatsoever
in any specific asset of the Company. To the extent that any party
acquires a right to receive payments under the Plan, such a right shall
be equivalent to that of an unsecured general creditor of the Company.
The company may establish one or more trusts, with such trustee as the
Committee may approve, for the purpose of providing for the payment of
deferred amounts. Such trust or trusts may be irrevocable, but the
assets thereof shall be subject to the claims of the Company's general
creditors. To the extent any deferred amounts or contributions under
the Plan are actually paid from any such trust, the
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Company shall have no further obligation with respect thereto, but to
the extent not so paid, such deferred amounts shall remain the
obligation of, and shall be paid by, the Company.
14.5 Nontransferability: In no event shall the Company or any Employer make
any payment under this plan to any assignee or creditor of a
Participant or of a beneficiary. Prior to the time of a payment
hereunder, a participant or a beneficiary shall have no right by way of
anticipation or otherwise to assign (including without limitation in
connection with a divorce) or otherwise dispose of any interest under
this Plan nor shall rights be assigned or transferred by operation of
law.
ARTICLE 15. 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.
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