Exhibit 10.33


 


Cascade
Natural Gas Corporation


Key
Performance Incentive Plan for Fiscal 2005


September
29, 2004


 


Cascade
Natural Gas Corporation (Cascade) has an incentive plan designed to incent
management and professional employees to achieve outstanding performance by
rewarding effective accomplishment of goals (Key Performance Goals) in areas
that are key to outstanding company performance.


 


All
salaried employees grade 9 and above are eligible for the program, except for
consumer representatives who participate in the Consumer Representative Bonus
plan in lieu of this program.


 


The objectives of this plan are
to:


•                  Reward outstanding performance, organizationally
and individually


•                  Link to attaining business objectives


•                  Reinforce team culture


•                  Drive performance of management and professionals
as well as overall organizational performance


•                  Provide opportunity for market-competitive pay for
management and professionals.


 


Performance Measures:


•                  Earnings per Share (EPS) – 70% of the award will be
based on EPS


•                  Achievement of Key Performance Goals (KPG) as
defined by goals set in individual performance reviews. – 30% of the award will
be based on KPG’s.


 


•                  Key Performance Goals must tie to the Corporate Business Objectives.


 


•                  Key Performance Goals must be specific, measurable, achievable, results
oriented, and time-based. (SMART)


 


•                  Key Performance Goals are those which have an impact on the
shareholders, company, department, district, or
region, not just individual performance.


 


•                  A Key Performance Goal is not routine performance of the employee’s
job.


 


•                  Key Performance Goals must be consistent with a high level of
performance expected from the salary grade or management level of the employee.


 


Officers shall be
responsible to review and approve Key Performance Goals for employees in their
area while considering company-wide and department


 





















 


consistency,
compliance with the criteria described above, and achievement. The Human
Resources Department shall review Key Performance Goals after they are approved
by officers in order to consider consistency,  compliance with plan criteria
described in this section and achievement.


 


Award Potentials


Employees
participating in the plan are eligible for an incentive payment.  The payment is calculated as a percentage of
the employee’s base pay and is dependent upon the achievement of the incentive
plan goals and company performance.  The
details of incentive payments are described below:


•                  The
midpoint award is calculated based on employee base pay and is expressed as a
percentage.


•                  In
order to earn an award under the plan, the goals outlined under each
performance measure must be attained. 
Performance at midpoint goals will produce midpoint award levels.


•                  Company
performance will modify all payments. 
The company must meet threshold earnings levels in order for the plan to
pay out.  Earnings goals are expressed as
earnings per share.  The size of the pool
will increase proportionately from the threshold to midpoint and from midpoint
to maximum with a maximum of 200% of midpoint, as is indicated in the table
below in the “Midpoint EPS” section.


•                  Key
Performance Goals must be submitted before December 31, 2004.  If goals are not submitted by this date,
participant will not be eligible for an award under the Plan.  Delayed submission of Goals because of
hardships due to unavoidable circumstances, such as illness, may be submitted
to the President and CEO for approval.


•                  Key
Performance Goals may be revised mid-year with approval by the responsible
officer and review by Human Resources.


 


Midpoint EPS


Definitions:


•                  Threshold
– The level that the plan would begin to pay out.


•                  Midpoint–   Achieving measures at midpoint levels result
in midpoint awards.


•                  Maximum
– The maximum level of payout for the plan – 200% of midpoint.


 


	
  Achievement

  Level

  	
   

  	
  Earnings per Share

  (net of Key Performance

  Incentive Plan, Team Incentive

  Plan and 401(k) Profit Sharing

  Plan)

  	
   

  	
  Funding Level

  	
   

  
	
  Threshold

  	
   

  	
  1.20

  	
   

  	
  0

  	
   

  
	
  Midpoint

  	
   

  	
  1.45

  	
   

  	
  100

  	
  %

  
	
  Maximum

  	
   

  	
  1.72

  	
   

  	
  200

  	
  %

  



 





















 


Midpoint Awards as a Percentage
of Base Pay:


CEO – 50%


CFO – 45%


COO – 45%


Senior Vice President – 25%


All other Officers – 20%


Grade 14 (other than officers) – 10%


Grade 12 & 13 – 6%


Grade 9, 10, and 11 – 4%


 


The above midpoint awards
do not include the Team Incentive Plan which has a midpoint payment of 4% of
eligible pay.


 


Timing of the Award Payments


Awards
will be paid annually.  Payments will be
made to employees by January 15 of the following fiscal year.


 


Eligibility


Employee’s
performance must meet expectations for their job by attaining a performance
rating of 3.0 or better to receive the full award for which they are eligible
under the plan.  Awards for employees
with a performance rating between 2.81 to 2.99 shall be eligible to receive a
reduced award as shown in the table below:


 




	
  Performance Rating

  	
   

  	
  Percentage of Award

  	
   

  
	
  3.00 or greater

  	
   

  	
  100

  	
  %

  
	
  2.95 to 2.99

  	
   

  	
  87.5

  	
  %

  
	
  2.90 to 2.94

  	
   

  	
  75.0

  	
  %

  
	
  2.85 to 2.89

  	
   

  	
  62.5

  	
  %

  
	
  2.81 to 2.84

  	
   

  	
  50.0

  	
  %

  
	
  2.8 or below.

  	
   

  	
  0

  	
   

  






 


Employees
receiving a 2.8 performance rating or less will not be eligible to receive an
award under this plan.


 


All
awards will be pro-rated based on the length of service in that plan year.  Employees must have a minimum of three months
of service with Cascade in order to be eligible to participate in the plan.


 


Base Pay Definition


For
exempt employees, Annual base pay for the fiscal year will be the basis for
calculating Key Performance Plan incentive awards. For nonexempt employees,
base pay and overtime pay for the fiscal year will be the basis for calculating
incentive awards.


 





















 


Benefits


Incentive
pay is included in the definition of pay for the purpose of matching and
employer contributions in the 401(k).


 


Terminations


Individuals
must be employed at the end of the fiscal year in order to be eligible to
receive an award.  Pro-rated awards will
be paid to those who terminate due to retirement, disability or death.


 


Disputes


If an employee has an
unresolved dispute or claim regarding the Key Performance Plan, the employee
may request that the matter be reviewed by a Board of Review per Company Policy
62.02.  If the employee is an officer,
the Board of Review shall be the Governance, Nominating and Compensation
Committee of the Board of Directors.


 


The
company reserves the right to alter, amend, or cancel this program at any time.