What is the primary purpose of this 8-K filing?

The primary purpose of this 8-K filing is to disclose the performance criteria and targets used to determine cash incentive awards for ONEOK's officers under the Annual Officer Incentive Plan (AOIP) for the fiscal year 2004. It provides transparency into how executive compensation is linked to the company's financial performance.

How was the 2004 corporate performance measured for officer incentives?

Corporate performance for 2004 was measured based on two key financial metrics: Return on Invested Capital (ROIC), which constituted 50% of the performance measure, and Earnings Per Share (EPS) exclusive of cumulative accounting changes, which constituted the other 50%.

What were the potential payouts for achieving performance targets?

The plan allowed for incentive payouts based on ROIC and EPS performance relative to predetermined threshold, target, and maximum levels. If both the maximum ROIC and target EPS were achieved or exceeded, the corporate performance portion of the incentive award could reach 200% of the officer's target award. Individual and business unit performance could further adjust this amount.

Were there any minimum performance requirements to receive an incentive payment?

Yes, there were minimum performance requirements. If the actual ROIC for 2004 was below the threshold level set by the Committee, no incentive amount would be paid based on that performance measure. Similarly, if the actual EPS for 2004 was below the threshold level, no incentive payment would be made based on the EPS performance measure.

OKE 8-K: Material Agreements

Summary

This 8-K filing from ONEOK, Inc. on January 19, 2005, details the company's performance-based incentive plan for its officers, specifically focusing on the criteria and targets set for the 2004 fiscal year. The Annual Officer Incentive Plan (AOIP) links executive compensation to key financial metrics, aiming to align management's interests with shareholder value creation. The report outlines how corporate performance for 2004 was measured, primarily through Return on Invested Capital (ROIC) and Earnings Per Share (EPS). The disclosure provides transparency into the compensation structure, indicating that specific threshold, target, and maximum levels were established for both ROIC and EPS by the Executive Compensation Committee. Achieving these metrics would determine the payout of cash incentive awards. The filing suggests that the company intended to reward officers based on their contributions to profitability and operational performance, with potential for significant bonuses if both maximum ROIC and target EPS were met or exceeded.

Key Highlights

1ONEOK's 2004 performance for its Annual Officer Incentive Plan (AOIP) was based on corporate and individual performance criteria.
2Corporate performance was measured by two key metrics: Return on Invested Capital (ROIC) and Earnings Per Share (EPS).
3ROIC accounted for 50% of the corporate performance measure, with specified threshold, target, and maximum levels set by the Executive Compensation Committee.
4EPS (exclusive of accounting changes) accounted for the other 50% of the corporate performance measure, also with set threshold and target levels.
5No incentive payment would be made for a metric if the actual performance fell below the established threshold level.
6The maximum incentive payout for the ROIC portion was capped at 300% of the target award, while the EPS portion was capped at 100% of the target award.
7If both maximum ROIC and target EPS were achieved or exceeded, the corporate performance portion of the incentive award would be 200% of the officer's target award, subject to further adjustment based on business unit and individual performance.

ONEOK INC /NEW/ 8-K Report, Material Agreement (Jan 19, 2005)

Summary

Key Highlights

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