exv10w56



 



EXHIBIT 10.56


Midland Cogeneration Venture

Limited Partnership

Amended Senior Management Incentive Plan




	1.	 	Purpose: The purpose of the Senior Management Incentive Plan is to:




	 	•	 	Provide an equitable and competitive level of compensation
that will permit the Midland Cogeneration Venture to attract,
retain, and motivate highly competent senior management employees.
	 
	 	•	 	Provide a financial incentive for senior management employees
to achieve superior levels of Company and individual performance and
thereby assist in the achievement of MCV goals.




	2.	 	Eligibility: Senior management employees in salary M-1 and above are
eligible for participation in the Plan. All participants will receive a
pro rata award equal to 1/12 of the amount they would otherwise be
entitled to for each full month of employment during the performance year.
	 
	3.	 	Administration: The Senior Management Incentive Plan will be
administered by the President and Chief Executive Officer of MCV and the
Vice President, Human Resources Communications and Public Affairs under
the direction of the MCV Partnership.
	 
	4.	 	Standard Award: The standard award for each senior management employee
will be determined by the MCV Organization and Compensation Subcommittee.
	 
	5.	 	Performance Factors and Final Award: Each standard award is converted to
a final award based on the degree of achievement in the Company financial
performance, the final payout factor for the Employee Incentive Plan and
individual performance factors. Individual goals of each participant in
this plan are prepared and approved by the President and Chief Executive
Officer prior to (or shortly after) the start of a performance year. At
the end of the year, or shortly thereafter, each plan participant prepares
a written evaluation on their goals and their immediate supervisor
establishes an achievement factor on the written evaluation of each
participant. Final approval is given by the President and Chief Executive
Officer of MCV.
	 
	 	 	The Employee Incentive Plan payout factor is determined by setting
specific performance goals (i.e., plant availability, plant efficiency,
cash flow, etc.) at the beginning of each year. At the end of the year,
or shortly thereafter, the actual performance results are determined for
each performance goal and a weighted payout factor is derived for the
Plan.
	 
	 	 	The Company financial performance factor is determined by calculating the
ratio of MCV’s actual net income for the performance year divided by the
budgeted net income



 






 







	 	 	for the performance year. Where the actual net income equals or exceeds
the budgeted net income for the performance year, the Company financial
performance factor will be in the range of 1.00 to 1.10. Where the ratio
of actual net income divided by the budgeted net income for the
performance year is less than .75, no final awards for any plan
participant will be made for that specific performance year.
	 
	 	 	The calculation of the final award for each participant will be computed
as follows: % individual goal achievement x Company financial
performance factor x Employee Incentive Plan payout factor x standard
award % x base salary.
	 
	 	 	All award calculations are reviewed and approved by the MCV Organization
and Compensation Subcommittee.
	 
	6.	 	Payment of Awards: One half of the total award will be paid in cash
within 14 days after approval by the MCV Organization and Compensation
Subcommittee for the year following the performance year. The amounts
required by law to be withheld for income tax and Social Security taxes
will be deducted from the award payments.
	 
	 	 	The second half of the total award will be made during the first week of
the following January. This second payment will be credited with sums in
lieu of interest from the first day of the month following the month in
which the award was granted to the date of payment. The “interest rate”
will be equivalent to the prime rate of interest set by Citibank, N.A.
compounded quarterly as of the first day of January, April, July, and
October of each year during the deferral period. The prime rate in
effect on the first day of January, April, July, and October shall be the
prime rate in effect for that quarterly period.
	 
	 	 	Those employees eligible to receive the deferred portion of the award
will be regular full-time employees of MCV still actively employed the
first normal business day of January one full year after each performance
year; those otherwise qualified employees on an approved leave of absence
on such date; and, with approval of the President and Chief Executive
Officer, those qualified employees whose employment terminated during or
after the Performance Year due to:




	 	•	 	Retirement with Retirement Income or Disability payments
under the Pension Plan;
	 
	 	•	 	Layoff because of changes in Company operations; or
	 
	 	•	 	Death of the employee.




	 	 	An employee whose services are terminated for cause during the
Performance Year shall not be eligible for any deferred amounts. Any
employee who resigns to accept employment elsewhere shall also be
ineligible for payment of deferred awards.
	 
	 	 	If for any reason the Midland Cogeneration Venture Senior Management
Incentive Plan should terminate, all deferred awards shall be immediately
payable to eligible participants as defined above.



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	7.	 	Change of Status During the Performance Year:




	 	a.	 	New Hire: A newly hired employee may be recommended for a
pro rata award based on the percentage of the Performance Year the
employee is in the position.
	 
	 	b.	 	Demotion: No award will be made to an employee who has been
demoted during the Performance Year due to performance.
	 
	 	c.	 	Termination: An employee whose services are terminated
during the Performance Year for reasons of misconduct, failure to
perform, or other performance-related reasons shall not be
considered for an award. If the termination is due to other reasons
such as reorganization and the termination is not due to a fault of
the employee, the employee may be considered for a pro rata award.
	 
	 	d.	 	Resignation: An employee who resigns to accept employment
elsewhere (including self-employment) will not be considered for an
award. If the resignation is due to other reasons (i.e., ill health
in the immediate family), the employee may be considered for a pro
rata award.
	 
	 	e.	 	Death, Disability, Retirement, and Leave of Absence: An
employee whose status as an active employee is changed during the
Performance Year for any of the reasons cited may be considered for
a pro rata award.




	8.	 	Impact on Benefit Plans: Payments made under the Plan will not be
considered as earnings for purposes of the Pension Plan, Savings Plan,
insurance plans, or any other employee benefit.
	 
	9.	 	Termination or Amendment of the Plan: Midland Cogeneration Venture at
any time may in writing terminate or amend the Plan.




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