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

This 8-K filing is to formally report revisions made on April 20, 2006, to ONEOK, Inc.'s 2006 Annual Officer Incentive Plan (AOIP). Specifically, it details the updated corporate performance criteria used to determine incentive awards for the company's officers.

How are executive incentives now measured under the revised AOIP for 2006?

The corporate performance criteria for 2006 are now split equally, with 50% based on the company's Return on Invested Capital (ROIC) and the other 50% based on adjusted Earnings Per Share (EPS). This represents a significant change from any previous weighting.

Are there any minimum performance requirements to receive incentive payments?

Yes, there are minimum requirements. No incentive payment will be made for the ROIC component if the company's actual ROIC for 2006 falls below the revised threshold level. Similarly, no incentive payment will be made for the EPS component if the company's actual EPS for 2006 is below the revised threshold level.

What are the maximum payouts possible based on these corporate performance criteria?

The incentive payment based on ROIC cannot exceed 300% of the target level set by the Committee. The incentive payment based on EPS cannot exceed 100% of the targeted payment. If both maximum ROIC and target EPS are achieved or exceeded, the portion of the award based on corporate criteria could reach 200% of the officer's target award.

OKE 8-K: Material Agreements

Summary

ONEOK, Inc. (OKE) filed an 8-K on April 25, 2006, to report revisions to its 2006 Annual Officer Incentive Plan (AOIP). The primary change involves the corporate performance criteria used to determine incentive awards for officers. This filing is important for investors as it details how executive compensation is linked to the company's financial performance, providing transparency into management's alignment with shareholder interests. The revised criteria for 2006 shift the performance weighting to 50% Return on Invested Capital (ROIC) and 50% adjusted Earnings Per Share (EPS). The plan outlines specific threshold, target, and maximum levels for both metrics, with conditions for payout and caps on individual performance measures. The Committee retains discretion to adjust awards based on business unit and individual performance, but the core corporate metrics are now clearly defined.

Key Highlights

1ONEOK, Inc. revised its 2006 Annual Officer Incentive Plan (AOIP) corporate performance criteria.
2The revised plan now weights Return on Invested Capital (ROIC) at 50% and adjusted Earnings Per Share (EPS) at 50%.
3Specific threshold, target, and maximum levels are established for both ROIC and EPS metrics.
4No incentive payment is made if actual ROIC falls below the revised threshold level.
5Incentive payments based on ROIC are capped at 300% of the target level.
6No incentive payment is made if actual EPS falls below the revised threshold level.
7Incentive payments based on EPS are capped at 100% of the target payment.
8The Executive Compensation Committee can adjust awards based on business unit and individual performance after corporate criteria are met.

ONEOK INC /NEW/ 8-K Report, Material Agreement (Apr 25, 2006)

Summary

Key Highlights

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