Document:

exv10wxay

 

Exhibit 10(a)

 

	 	 	 
	

	 	WELLS FARGO BONUS PLAN

 

The Plan is amended effective January 1, 2006 and supersedes the Wells
Fargo Bonus Plan originally effective January 1, 2000, and clarified effective
January 1, 2004. Participants, incentive opportunities and performance
objectives shall be identified annually.

Page 1 of 8 pages

 

PURPOSE OF THE PLAN

The purpose of the Wells Fargo Bonus Plan (the “Plan”) is to motivate a select group of
management, supervisory and individual contributors to achieve superior results for Wells
Fargo & Company and its subsidiaries (“Wells Fargo”). The Plan is designed to provide
Participants with incentive compensation opportunities that focus on individual
accountability for appropriate risk management and full compliance with applicable laws and
regulations, as well as individual and team contributions through the measurement of
meaningful performance goals that are consistent with Wells Fargo’s corporate and business
unit objectives.

This document is comprised of three sections:

	 	1.	 	Plan Eligibility
	 
	 	2.	 	Plan Components
	 
	 	3.	 	Plan Administration

For questions related to this document, policies or the administration of the Plan, please
contact your local Human Resources representative.

PLAN ELIGIBILITY

	A.	 	Plan Eligibility
	 
	 	 	A select group of Wells Fargo management, supervisors and individual contributors who
are in a position to control or influence business results are eligible to
participate in the Plan (“Participants”). Eligibility for participation is
determined on a case-by-case basis. Business unit managers are responsible for
identifying Participants within their business units prior to the beginning of the
Plan Year.
	 
	 	 	The intent of the Plan is to provide incentive awards to those Participants who are
not eligible for a bonus or incentive compensation under any other plan or written
agreement with Wells Fargo. Therefore, Plan Participants who participate in any other
Wells Fargo-sponsored incentive compensation plan are not eligible to receive an
award under this Plan.
	 
	B.	 	Plan Qualifiers.
	 
	 	 	For purposes of this Plan, a “Disqualifying Factor” is an event, the occurrence of
which immediately invalidates a Participant’s opportunity for an incentive award. If
a Participant’s incentive opportunity is subject to a Disqualifying Factor and the
event occurs, the Participant shall have no incentive opportunity for that particular
Plan Year.

	 	1.	 	A Plan Participant must be employed by Wells Fargo as of the last
day of the Plan Year in order to be eligible for an incentive award under the
Plan, unless otherwise noted below or in the Plan Administration section. There
will be no incentive opportunity for the Plan Year for those Participants who
experience a voluntary or involuntary termination before the last day of the
Plan Year. Exceptions may be made if the termination is a result of the
Participant’s retirement, death or a qualifying event under the Wells Fargo &
Company Salary Continuation Pay Plan

Page 2 of 8 pages

 

	 	 	 	as set forth in the leave of absence or death or retirement policies in the
Plan Administration section.
	 
	 	2.	 	The Corporate EPS (Earnings Per Share) threshold must be met for
payout to occur under this Plan. If the threshold EPS is not met, no bonuses
will be earned unless specifically authorized by the Wells Fargo Board of
Directors.

	 	 	Business unit managers should work with their HR representative to identify any other
Disqualifying Factors that may impact a Participant’s eligibility under the Plan.
	 
	 	 	In addition to the Disqualifying Factors described above, a Participant’s bonus under
the Plan may be adjusted or denied, regardless of meeting individual Performance Measures or
the Corporate EPS threshold, for unsatisfactory performance or non-compliance or violation
of Wells Fargo’s:

	 	1.	 	Code of Ethics and Business Conduct;
	 
	 	2.	 	Information Security Policy, and/or
	 
	 	3.	 	Compliance and Risk Management Accountability Policy.

PLAN COMPONENTS

	 	 	 
	Bonus Opportunity

	 	Business unit managers, working with Human Resources, shall establish an incentive target
for each Participant’s position.
	 
	 	 
	 

	 	The incentive opportunity should be a range around the target:

	 	 	 	 	 	 	 	 	 
	 
	 	•
	 	Threshold
	 	-
	 	50% of the target bonus
	 

	 	 	 	 	 	-
	 	Paid for satisfactory performance that falls short
of target.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Target
	 	-
	 	100% of the target bonus
	 

	 	 	 	 	 	-
	 	Paid for good, commendable on plan
performance.
	 
	 	 	 	 	 	 	 	 
	 

	 	•
	 	Maximum
	 	-
	 	150% of target bonus
	 

	 	 	 	 	 	-
	 	Paid for performance that exceeds expectations.

	 	 	 
	Performance Measures

	 	A Performance Measure defines the action or resultant performance expected of a
Participant in a given Plan Year.
	 
	 	 
	 

	 	Performance Measures may vary from year to year, from position to position or from one
Participant to another. Typically each Participant should have three to five measures
set by their business unit manager.
	 
	 	 
	 

	 	The Performance Measures should be indicators of the expected:

	 	1.	 	Overall financial success at the Participant’s level or of the

Page 3 of 8 pages

 

	 	 	 	Participant’s business
unit
	 
	 	2.	 	Tactical, operation achievements which will contribute to the overall success at the
Participant’s level or business unit
	 
	 	 	 	and/or
	 
	 	3.	 	Major strategic milestones achieve by or on behalf of the Participant, the
Participant’s business unit or Wells Fargo

	 	 	 
	Performance

Measures

(continued)

	 	The business unit manager is responsible for defining the Performance Measures within the
Plan. The business unit manager is encouraged to consult with the Participant and Human
Resources in identifying the Performance Measure.
	 
	 	 
	 

	 	Performance measures should be established for each Participant to be effective as of the
beginning of the Plan Year. All Performance Measures and Awards are subject to review
and modification at higher levels of the organization.
	 
	 	 
	 

	 	Some characteristics of Performance measures:

	 	•	 	The Performance Measures should include identifiable activities and/or results
for each level of achievement. Most Performance Measures (commonly referred to as “MBOs”
or Management Business Objectives) should have at least three defined Performance Levels:
Threshold, Target and Maximum.
	 
	 	•	 	At least one Performance Measure should have a financial objective that is linked
to overall corporate objectives.
	 
	 	•	 	For Staff Participants, at least one Performance Measure should be based on EPS.
	 
	 	•	 	Where possible, Participants should have at least one measure linked to either
EPS, P&L or expense management. These measures can be set up as distinct MBOs or plan
disqualifiers/hurdles.
	 
	 	•	 	For Compliance Professionals

	 	1.	 	The financial goal must be tied to the financial performance of the manager who is at
least one level above the Compliance Professional’s immediate supervisor.
	 
	 	2.	 	The Compliance Professional’s direct manager will evaluate the Compliance
Professional’s performance measures with input from the Compliance Professional’s

Page 4 of 8 pages

 

	 	 	 	dotted-line manager(s). The final award recommendation under this Plan will be jointly
approved by the direct manager and the dotted-line manager.

	 	 	 
	 

	 	More suggestions on writing good MBOs can be obtained from HR or can be found in the
Wells Fargo Bonus Plan calculator.
	 
	 	 
	Measure Weighting
and Scoring

	 	While Performance Levels are designated as target, threshold and maximum, individual
measures can be scored as either an all-or-nothing goal or on a scale.
Performance Measures may be weighted equally or weighted individually to correspond with
the Participant’s accountability, strategic and tactical priorities, and/or the
difficulty of achieving the goal.
	 
	 	 
	 

	 	The scores for multiple Performance Measures are aggregated to determine the final award
level. The business unit manager is responsible for identifying the target, threshold
and maximum Performance Levels and the scoring guides that will be used to calculate the
Participants incentive award.
	 
	 	 
	Award Calculation

	 	Performance shall be evaluated as soon as practicable following completion of the Plan
Year by the Participant’s business unit manager and/or any other manager responsible for
reviewing incentive compensation awards in Participant’s business unit. All awards under
the Plan are subject to the following guidelines:

	 	•	 	Each Performance Measure is evaluated individually following the end of the Plan
Year. The Participant’s incentive award for a Plan Year is determined by adding the
values determined for each Performance Measure taking into consideration any assigned
weighting. The incentive award should be consistent with the overall Target Bonus
opportunity identified for the Participant’s position.
	 
	 	•	 	A Participant’s award may be increased or decreased by up to 15% of its value, on
a discretionary basis by the manager of the Participant’s business unit.

	 	•	 	Incentive awards are based on the Participant’s base salary and will be paid to
the Participant by March 15th following the end of the Plan Year.
	 
	 	•	 	With approval from the Plan Administrator, an incentive award may be reduced in
any amount or denied for unsatisfactory performance. An incentive award may also be
denied if a Participant is involuntarily terminated before the date that the
Participant’s incentive award is paid.

Page 5 of 8 pages

 

PLAN ADMINISTRATION

	 	A.	 	Plan Administrator
	 
	 	 	 	The Plan Administrator is the Executive Vice President and Director of Human Resources.
The Plan Administrator has full discretionary authority to administer and interpret the
Plan and may, at any time, delegate to personnel of Wells Fargo such responsibilities as
he or she considers appropriate to facilitate the day-to-day administration of the Plan.
The Plan Administrator also has the full discretionary authority to adjust or amend a
Participant’s incentive opportunity under the Plan at any time.
	 
	 	 	 	Plan commitments or interpretations (oral or written) by anyone other than the Plan
Administrator or one of his/her delegates are invalid and will have no force upon the
policies and procedures set forth in this Plan.
	 
	 	B.	 	Plan Year
	 
	 	 	 	Participant performance is measured and financial records are kept on a “Plan Year”
basis. The Plan Year is the 12-month period beginning each January 1 and ending on the
following December 31, unless the Plan is modified, suspended or terminated.
	 
	 	C.	 	Disputes
	 
	 	 	 	If a Participant has a dispute regarding his/her incentive award under the Plan, the
Participant should attempt to resolve the dispute with the manager of his/her business
unit. If this is not successful, the Participant should prepare a written request for
review addressed to the Participant’s Human Resources representative. The request for
review should include any facts supporting the Participant’s request as well as any
issues or comments the Participant deems pertinent. The Human Resources representative
will send the Participant a written response documenting the outcome of this review in
writing no later than 60 days following the date of the Participant’s written request.
(If additional time is necessary, the Participant shall be notified in writing.) The
determination of this request shall be final and conclusive upon all persons.
	 
	 	D.	 	Amendment or Termination
	 
	 	 	 	The Board of Directors of Wells Fargo & Company (the “Company”), and the Human Resources
Committee of the Board of Directors, the Company’s President, any Vice Chairman, or the
Executive Vice President of Human Resources may amend, suspend or terminate the Plan at
any time, for any reason. No amendment, suspension or termination of the Plan shall
adversely affect a Participant’s incentive award earned under the Plan prior to the
effective date of the amendment, suspension or termination, unless otherwise agreed to by
the Participant.
	 
	 	E.	 	Leaves of Absence

Page 6 of 8 pages

 

	 	 	 	Incentive awards payable under the Plan may be pro-rated for Participants who go on a
leave of absence provided the Participant has actively worked at least three months
during the Plan Year and the Participant’s performance contributed towards the
achievement of some or all of the Participant’s Performance Measures. If a Participant
satisfies all of the Participant’s Performance Measures, the Participant’s award should
not be pro-rated. Business units should apply this criteria consistently to all
Participants.
	 
	 	 	 	For Participants who receive notice of a qualifying event under the Wells Fargo & Company
Salary Continuation Pay Plan, the Notice Period (as defined by that plan) should be
considered in determining whether the Participant satisfies the three-month “actively at
work” requirement. Incentive awards will be determined following the end of the Plan
Year.
	 
	 	F.	 	Changes in Employment Status

	 	1.	 	Employees hired after the beginning of the Plan Year may be eligible to
participate in the Plan. Incentive Opportunity Percentages and Performance Measures
should be designed accordingly. Where Performance Measures are impractical to
develop for a partial Plan Year, eligibility should be delayed until the next Plan
Year.
	 
	 	2.	 	If, during the Plan Year, a Participant transfers to another business
unit or receives a promotion to a new position within Wells Fargo, the Participant’s
incentive award should be pro-rated provided the Participant met some or all of the
Performance Measures prior to the transfer or promotion. Incentive awards will be
determined following the end of the Plan Year.

	 	G.	 	Death or Retirement
	 
	 	 	 	In the event of a Participant’s death or retirement during the Plan Year, the
Participant’s incentive award may be pro-rated provided the Participant actively worked
for at least three months during the Plan Year and met some or all of the Participant’s
Performance Measures.
	 
	 	H.	 	Withholding Taxes
	 
	 	 	 	Wells Fargo shall deduct from all payments under the Plan an amount necessary to satisfy
federal, state or local tax withholding requirements.
	 
	 	I.	 	Not an Employment Contract
	 
	 	 	 	The Plan is not an employment contract and participation in the Plan does not alter a
Participant’s at-will employment relationship with Wells Fargo. Both the Participant
and Wells Fargo are free to terminate their employment relationship at any time for any
reason. No rights in the Plan may be claimed by any person whether or not he/she is
selected to participate in the Plan. No person shall acquire any right to an accounting
or to examine the books or the affairs of Wells Fargo.
	 
	 	J.	 	Assignment
	 
	 	 	 	No Participant shall have any right or power to pledge or assign any rights, privileges,
or incentive awards provided for under the Plan.

Page 7 of 8 pages

 

	 	K.	 	Unsecured Obligations
	 
	 	 	 	Incentive awards under the Plan are unsecured obligations of the Company.
	 
	 	L.	 	Pro-Rated Awards
	 
	 	 	 	In the event that an award needs to be pro-rated the following methodology should be
used.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Annual
Salary	 	X
	 	Ratio

Of Months

Worked
	 	X
	 	Target
Incentive
%
 
	 	=
	 	Target
Pro-Rated
Bonus
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	The annual salary should be multiplied by the ratio of months worked during the
year by the target bonus percentage.
	 
	 	 	 	The ratio of months worked is equal to the number of full months worked in the
qualifying position divided by 12.
	 
	 	 	 	For example, a Participant is transfers to another position on November 1st. Their
salary was $100,000 per year at the time of transfer, and they had a 10% bonus
target. They achieved all their goals at target level. Their bonus would be:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

Salary

 

$100,000	 	X
	 	 
Months

Complete

10/12
	 	X
	 	 
Target

Incentive

10%
	 	=
	 	 
Pro-Rated

Bonus

$8,333.33
	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	M.	 	Code of Conduct
	 
	 	 	 	Violation of the terms or the spirit of the Plan and/or Wells Fargo’s Code of Ethics and
Business Conduct by the Participant and/or the Participant’s supervisor, or other
serious misconduct (including, but not limited to, gaming which is more fully discussed
below), are grounds for disciplinary action, including disqualification from further
participation in the Plan (including awards payable under the terms of the Plan) and/or
immediate termination of employment.
	 
	 	 	 	Participants are expected to adhere to ethical and honest business practices.
Participant who violates the spirit of the Plan by “gaming” the system become
immediately ineligible to participate in the Plan. “Gaming” is the manipulation and/or
misrepresentation of sales or sales reporting in order to receive or attempt to receive
compensation, or to meet or attempt to meet goals.

Page 8 of 8 pagesEX-10(A) Amendment to the 2006 Gainsharing Plan

 

Exhibit No. 10(A)

AMENDMENT TO

THE PROGRESSIVE CORPORATION

2006 GAINSHARING PLAN

Section 7 of the Plan is hereby amended to read as follows:

Subject to Paragraph 9 below, no later than December 31 of each Plan year,
each participant will receive an initial payment in respect of his or her Annual
Gainsharing Payment for that Plan year equal to 75% of an amount calculated on the basis
of Paid Earnings for the first 24 pay periods of the Plan year, estimated earnings for
the remainder of the Plan year and performance data through the first 11 months of the
Plan year (estimated, if necessary). No later than February 15 of the following
year, each participant will receive the balance of his or her Annual Gainsharing
Payment, if any, for such Plan year, based on his or her Paid Earnings and performance
data for the entire Plan year.

Any Plan participant who is then eligible to participate in The Progressive
Corporation Executive Deferred Compensation Plan (“Deferral Plan”) may elect to defer
all or a portion of the Annual Gainsharing Payment otherwise payable to him/her under
this Plan, subject to and in accordance with the terms of the Deferral Plan.

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