Exhibit
10.1
EXECUTIVE
EMPLOYMENT
AND SEVERANCE
AGREEMENT
By and
Between
INTEGRYS ENERGY
GROUP, INC.
And
___________________________
As Amended and
Restated Effective January 1, 2009
Table of
Contents
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Section
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Page
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1.
|
Definitions
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2
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(a)
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Act
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2
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(b)
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2
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(c)
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Beneficial
Owner
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3
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(d)
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Cause
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4
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(e)
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Change in
Control of the Company
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5
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(f)
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Code
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6
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(g)
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Continuing
Director
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6
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(h)
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Covered
Termination
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6
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(i)
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Employment
Period
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6
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(j)
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Good
Reason
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7
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(k)
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Normal
Retirement Date
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8
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(l)
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Person
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8
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(m)
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Separation from
Service
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8
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(n)
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Termination of
Employment
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9
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(o)
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Termination
Date
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10
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2.
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Termination
or Cancellation Prior to Change in Control
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13
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3.
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Employment
Period
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14
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4.
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Duties
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14
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5.
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Compensation
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15
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6.
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Annual
Compensation Adjustments
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18
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Termination For
Cause or Without Good Reason
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18
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8.
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Termination
Giving Rise to a Termination Payment
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18
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9.
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Payments Upon
Termination
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20
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(a)
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Accrued
Benefits
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20
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(b)
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Termination
Payment
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21
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10.
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Death
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27
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11.
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Retirement
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27
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12.
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Termination
for Disability
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28
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13.
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Termination
Notice and Procedure
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28
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14.
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Further
Obligations of the Executive
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29
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(a)
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Competition
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29
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(b)
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Confidentiality
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30
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15.
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Expenses
and Interest
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30
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16.
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Payment
Obligations Absolute
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31
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17.
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Successors
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31
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18.
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Severability
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33
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19.
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Amendment
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33
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20.
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Withholding
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33
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21.
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Certain
Rules of Construction
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33
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22.
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Governing
Law; Resolution of Disputes
|
34
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23.
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Notice
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34
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No
Waiver
|
35
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25.
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Headings
|
35
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Code Section
409A Compliance
|
35
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EXECUTIVE
EMPLOYMENT AND SEVERANCE AGREEMENT
THIS AGREEMENT, made and entered
into as of the _____ day of _______________, 2008, by and between
Integrys Energy Group, Inc., a Wisconsin corporation (hereinafter
referred to as the “Company”), and ____________________
(hereinafter referred to as “Executive”).
W I T N E S S E T
H
WHEREAS, the Executive and the
Company are parties to a Key Executive Employment and Severance
Agreement that was originally effective as of May 2,
1997;
WHEREAS, the Executive is
employed by the Company and/or a subsidiary of the Company (the
“Employer”) in a key executive capacity and the
Executive’s services are valuable to the conduct of the
business of the Company;
WHEREAS, the Executive possesses
intimate knowledge of the business and affairs of the Company and
has acquired certain confidential information and data with respect
to the Company;
WHEREAS, the Company desires to
insure, insofar as possible, that it will continue to have the
benefit of the Executive’s services and to protect its
confidential information and goodwill;
WHEREAS, the Company recognizes
that circumstances may arise in which a change in control of the
Company occurs, through acquisition or otherwise, thereby causing
current uncertainty about the Executive’s future employment
with the Employer without regard to the Executive’s
competence or past contributions, which uncertainty may result in
the loss of valuable services of the Executive to the detriment of
the Company and its shareholders, even if such a change in control
never does in fact occur, and the Company and the Executive wish
to
provide reasonable security to
the Executive against changes in the Executive’s relationship
with the Company in the event of certain changes in
control;
WHEREAS, the Company and the
Executive are desirous that any proposal for a change in control or
acquisition of the Company will be considered by the Executive
objectively and with reference only to the best interests of the
Company and its shareholders;
WHEREAS, the Executive will be
in a better position to consider the Company’s best interests
if the Executive is afforded reasonable security, as provided in
this Agreement, against altered conditions of employment which
could result from any such change in control or acquisition;
and
WHEREAS, it is desirable to
amend and restate the Key Executive Employment and Severance
Agreement between the Executive and the Company;
NOW, THEREFORE, in consideration
of the foregoing and of the mutual covenants and agreements
hereinafter set forth, the parties hereto mutually covenant and
agree as follows, which shall replace the Key Executive Employment
and Severance Agreement presently in effect between the Executive
and the Company:
1.
Definitions .
(a)
Act . For purposes of this Agreement, the
term “Act” means the Securities Exchange Act of 1934,
as amended.
(b)
Affiliate and Associate . An
“Affiliate” of, or a person “affiliated”
with, a specified person, is a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by,
or is under common control with, the person specified and the term
“Associate” used to indicate a relationship with any
person, means (1) any corporation or organization (other than the
registrant or a majority-owned subsidiary of the registrant) of
which
such person is an officer or
partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, (2) any trust or
other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a
similar fiduciary capacity, and (3) any relative or spouse of such
person, or any relative of such spouse, who has the same home as
such person or who is a director or officer of the registrant or
any of its parents or subsidiaries.
(c)
Beneficial Owner . For purposes of this
Agreement, a Person shall be deemed to be the “Beneficial
Owner” of any securities:
(i) which
such Person or any of such Person’s Affiliates or Associates
has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided , however , that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, (A)
securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are
accepted for purchase or (B) securities issuable upon exercise of
any rights agreement that the Company may have in effect at a time
before the issuance of such securities;
(ii) which
such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has
“beneficial ownership” of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Act),
including pursuant to any agreement,
arrangement or understanding;
provided , however , that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if the
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under the Act
and (B) is not also then reportable on a Schedule 13D under the Act
(or any comparable or successor report); or
(iii) which
are beneficially owned, directly or indirectly, by any other Person
with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in Subsection 1(c) (ii) above) or
disposing of any voting securities of the Company.
(d)
Cause . “Cause” for termination by
the Company of the Executive’s employment in connection with
a Change of Control of the Company shall, for purposes of this
Agreement, be limited to: (i) the engaging by the
Executive in intentional conduct not taken in good faith which has
caused demonstrable and serious financial injury to the Company, as
evidenced by a determination in a binding and final judgment, order
or decree of a court or administrative agency of competent
jurisdiction, in effect after exhaustion or lapse of all rights of
appeal, in an action, suit or proceeding, whether civil, criminal,
administrative or investigative; (ii) conviction of a felony (as
evidenced by binding and final judgment, order or decree of a court
of competent jurisdiction, in effect after exhaustion of all rights
of appeal) which substantially impairs the Executive’s
ability to perform his duties or responsibilities; or (iii)
continuing willful
and unreasonable refusal by the
Executive to perform the Executive’s duties or
responsibilities (unless significantly changed without the
Executive’s consent).
(e)
Change in Control of the Company . For purposes
of this Agreement, a Change in Control of the Company shall be
deemed to have occurred if:
(i) any
Person (other than any employee benefit plan of the Company or of
any subsidiary of the Company, any Person organized, appointed or
established pursuant to the terms of any such benefit plan or any
trustee, administrator or fiduciary of such a plan) is or becomes
the Beneficial Owner of securities of the Company representing at
least 30% of the combined voting power of the Company’s then
outstanding securities;
(ii) one-half
or more of the members of the Board are not Continuing
Directors;
(iii) there
shall be consummated any merger, consolidation, or reorganization
of the Company with any other corporation as a result of which less
than 50% of the outstanding voting securities of the surviving or
resulting entity are owned by the former shareholders of the
Company other than a shareholder who is an Affiliate or Associate
of any party to such consolidation or merger;
(iv) there
shall be consummated any merger of the Company or share exchange
involving the Company in which the Company is not the continuing or
surviving corporation other than a merger of the Company in which
each of the holders of the Company’s Common Stock immediately
prior to the merger have
the same proportionate ownership
of common stock of the surviving corporation immediately after the
merger;
(v) there
shall be consummated any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company to a Person which
is not a wholly owned subsidiary of the Company; or
(vi) the
shareholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company.
(f)
Code . For purposes of this Agreement, the term
“Code” means the Internal Revenue Code of 1986,
including any amendments thereto or successor tax codes
thereof.
(g)
Continuing Director . For purposes of this
Agreement, the term “Continuing Director” means (i) any
member of the Board of Directors of the Company who was a member of
such Board on the date of this Agreement, (ii) any successor of a
Continuing Director who is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then on such
Board and (iii) additional directors elected by a majority of the
Continuing Directors then on such Board.
(h)
Covered Termination . Except as provided in
Section 2(b) hereof, for purposes of this Agreement, the term
“Covered Termination” means any Termination of
Employment where the Termination Date is any date on or after the
date on which a Change in Control of the Company has occurred and
prior to the end of the Employment Period.
(i)
Employment Period . For purposes of this
Agreement, the term “Employment Period” means a period
commencing on the date of a Change in Control of the
Company, and ending at 11:59
p.m. Central Time on the earlier of the third anniversary of such
date or the Executive’s Normal Retirement Date.
(j)
Good Reason . For purposes of this Agreement, the
Executive shall have a “Good Reason” for termination of
employment in connection with a Change in Control of the Company in
the event of:
(i) any
breach of this Agreement by the Company, including specifically any
breach by the Company of its agreements contained in Sections 4, 5
or 6 hereof;
(ii) the
removal of the Executive from, or any failure to reelect or
reappoint the Executive to, any of the positions held with the
Company or the Employer on the date of the Change in Control of the
Company or any other positions with the Company or the Employer to
which the Executive shall thereafter be elected, appointed or
assigned, except in the event that such removal or failure to
reelect or reappoint relates to the termination by the Company of
the Executive’s employment for Cause or by reason of
disability pursuant to Section 12 hereof;
(iii) a
good faith determination by the Executive that there has been a
significant adverse change, without the Executive’s written
consent, in the Executive’s working conditions or status with
the Company or the Employer from such working conditions or status
in effect during the 180-day period immediately prior to the Change
in Control of the Company, including but not limited to (A) a
significant change in the nature or scope of the Executive’s
authority, powers, functions, duties or responsibilities, or (B) a
significant reduction in the level of
support services, staff,
secretarial and other assistance, office space and accoutrements;
or
(iv) failure
by the Company to obtain the agreement referred to in Section 17(a)
hereof as provided therein.
(k)
Normal Retirement Date . For purposes of this
Agreement, the term “Normal Retirement Date” means the
earlier of (i) “Normal Retirement Date” as defined in
Part A of the Wisconsin Public Service Corporation Retirement
Plan, or any successor plan, as in effect on the date of the Change
in Control of the Company or (ii) such earlier retirement date
chosen by the Executive prior to the commencement of the Employment
Period.
(l)
Person . For purposes of this Agreement, the term
“Person” shall mean any individual, firm, partnership,
corporation or other entity, including any successor (by merger or
otherwise) of such entity, or a group of any of the foregoing
acting in concert.
(m)
Separation from Service . For purposes of this
Agreement, the term “Separation from Service” means the
date on which the Executive has a Termination of Employment or if
later, separates from service (within the meaning of Code Section
409A) from the Company and each other corporation, trade or
business that, with the Company, constitutes a controlled group of
corporations or group of trades or businesses under common control
within the meaning of Code Sections 414(b) or (c). For
this purpose, Code Sections 414(b) and (c) shall be applied by
substituting “at least 50 percent” for “at least
80 percent” each place it
appears. Specifically, if Executive
continues to provide services to the Company or an affiliate in a
capacity other than as an employee, such shift in status is not
automatically a Separation from Service.
(n)
Termination of Employment . For purposes of this
Agreement, the Executive’s “Termination of
Employment” shall occur when the Company and Executive
reasonably anticipate that no further services will be performed by
the Executive for the Company after a certain date or that the
level of bona fide services the Executive will perform after such
date as an employee of the Company will permanently decrease to no
more than 20% of the average level of bona fide services performed
by the Executive (whether as an employee or independent contractor)
for the Company over the immediately preceding 36-month period (or
such lesser period of services). For purposes of this
definition, the term Company includes each other corporation, trade
or business that, with the Company, constitutes a controlled group
of corporations or group of trades or businesses under common
control within the meaning of Code Sections 414(b) or
(c). For this purpose, Code Sections 414(b) and (c)
shall be applied by substituting “at least 50 percent”
for “at least 80 percent” each place it
appears. An Executive is not considered to have a
Termination of Employment if the Executive is absent from active
employment due to military leave, sick leave or other bona fide
leave of absence if the period of such leave does not exceed the
greater of (i) six months, or (ii) the period during which the
Executive’s right to reemployment by the Company or
controlled group member is provided either by statute or by
contract; provided that if the leave of absence is due to a
medically determinable physical or mental impairment that can be
expected to result in death or last for a continuous period of not
less than six months, where such impairment causes the Executive to
be unable to perform the duties of his or her position of
employment or any substantially similar position of employment, the
leave may be extended for up to 29 months without causing a
Termination of Employment. Further, for purposes of
determining whether the Executive has incurred a Termination of
Employment, if the Executive is not actively at work during the
period
that there exists a dispute
pursuant to Section 1(o)(v)(B) or (C), the Executive shall be
considered to be on a bona fide leave of absence for which his
right to reemployment is guaranteed during the period that begins
on the date on which the Executive last performs active services
and ends on the Termination Date that ultimately is established
pursuant to Section 1(o)(v)(B) or (C).
(o)
Termination Date . For purposes of this
Agreement, except as otherwise provided in Section 2(b),
Section 10(b) and Section 17(a) hereof, the term “Termination
Date” means (i) if the Executive’s employment is
terminated by the Executive’s death, the date of death; (ii)
if the Executive’s employment is terminated by reason of
voluntary early retirement, as agreed in writing by the Company and
the Executive, the date of such early retirement which is set forth
in such written agreement; (iii) if the Executive’s
employment is terminated for purposes of this Agreement by reason
of disability pursuant to Section 12 hereof, the earlier of thirty
days after the Notice of Termination is given or one day prior to
the end of the Employment Period; (iv) if the Executive’s
employment is terminated by the Executive voluntarily (other than
for Good Reason), the date the Notice of Termination is given; and
(v) if the Executive’s employment is terminated by the
Company (other than by reason of disability pursuant to Section 12
hereof) or by the Executive for Good Reason, the earlier of thirty
days after the Notice of Termination is given or one day prior to
the end of the Employment Period. Notwithstanding the
foregoing,
(A) If
termination is for Cause pursuant to Section 1(d)(iii) of this
Agreement and if the Executive has cured the conduct constituting
such Cause as described by the Company in its Notice of Termination
within such thirty day or shorter period, then the
Executive’s employment
hereunder shall continue as if the Company had not delivered its
Notice of Termination.
(B) If
the Company (or the Employer) shall give a Notice of Termination
for Cause or by reason of disability and the Executive in good
faith notifies the Company that a dispute exists concerning the
termination within the fifteen day period following receipt
thereof, then the Executive may elect to continue his employment
during such dispute, and the Termination Date shall be determined
under this paragraph. If the Executive so elects and it
is thereafter determined that Cause or disability (as the case may
be) did exist, the Termination Date shall be the earlier of (1) the
date on which the dispute is finally determined, either (x) by
mutual written agreement of the parties or (y) in accordance with
Section 22 hereof, (2) the date of the Executive’s death, or
(3) one day prior to the end of the Employment
Period. If the Executive so elects and it is thereafter
determined that Cause or disability (as the case may be) did not
exist, then the employment of the Executive hereunder shall
continue after such determination as if the Company (of the
Employer) had not delivered its Notice of Termination and there
shall be no Termination Date arising out of such
Notice. In either case, this Agreement continues, until
the Termination Date, if any, as if the Company (or the Employer)
had not delivered the Notice of Termination except that, if it is
finally determined that the Company (or the Employer) properly
terminated the Executive for the reason asserted in the Notice of
Termination, the Executive shall in no case be entitled to a
Termination Payment (as hereinafter defined) arising out of events
occurring after the Company delivered its Notice of
Termination.
(C) If
the Executive shall in good faith give a Notice of Termination for
Good Reason and the Company (or the Employer) notifies the
Executive that a dispute exists concerning the termination within
the fifteen day period following receipt thereof, then the
Executive may elect to continue his employment during such dispute
and the Termination Date shall be determined under this
paragraph. If the Executive so elects and it is
thereafter determined that Good Reason did exist, the Termination
Date shall be the earliest of (1) the date on which the dispute is
finally determined, either (x) by mutual written agreement of the
parties or (y) in accordance with Section 22 hereof, (2) the date
of the Executive’s death or (3) one day prior to the end of
the Employment Period. If the Executive so elects and it
is thereafter determined that Good Reason did not exist, then the
employment of the Executive hereunder shall continue after such
determination as if the Executive had not delivered the Notice of
Termination asserting Good Reason and there shall be no Termination
Date arising out of such Notice. In either case, this
Agreement continues, until the Termination Date, if any, as if the
Executive had not delivered the Notice of Termination except that,
if it is finally determined that Good Reason did exist, the
Executive shall in no case be denied the benefits described in
Sections 8(b) and 9 hereof (including a Termination Payment) based
on events occurring after the Executive delivered his Notice of
Termination.
(D) Except
as provided in Paragraph (B) and (C) above, if the party receiving
the Notice of Termination notifies the other party that a dispute
exists concerning the termination within the appropriate period
following receipt thereof and it is finally determined that the
reason asserted in such Notice of Termination did not exist, then
(1) if such Notice was delivered by the Executive, the Executive
will be deemed to have
voluntarily terminated his
employment and the Termination Date shall be the earlier of the
date fifteen days after the Notice of Termination is given or one
day prior to the end of the Employment Period and (2) if delivered
by the Company, the Company will be deemed to have terminated the
Executive other than by reason of death, disability or
Cause.
2.
Termination or Cancellation Prior to Change in Control
.
(a) Subject
to Subsection 2(b) hereof, the Company (and the Employer) and the
Executive shall each retain the right to terminate the employment
of the Executive or terminate and cancel this Agreement at any time
prior to a Change in Control of the Company. Subject to
Subsection 2(b) hereof, in the event the Executive’s
employment is terminated by the Company (or the Employer) prior to
a Change in Control of the Company, this Agreement shall be
terminated and cancelled and of no further force and effect, and
any and all rights and obligations of the parties hereunder shall
cease. In the event the Executive’s employment is
terminated by the Executive prior to a Change in Control of the
Company, except for obligations of the Executive in Section 14(b)
hereof which shall survive such termination, this Agreement shall
be terminated and cancelled and of no further force and effect and
any and all rights and obligations of the parties except those in
Section 14 shall cease.
(b) Anything
in this Agreement to the contrary notwithstanding, if a Change in
Control of the Company shall occur and if the Executive’s
employment with the Company or a subsidiary of the Company shall
have been terminated by the Company or the Employer (other than a
termination due to the Executive’s death or as a result of
the Executive’s disability) or if this Agreement shall have
been otherwise terminated and cancelled by the Company during the
period of 180 days prior to the date on which the Change in Control
of the Company shall occur,
then for all purposes of this
Agreement such termination of employment shall be deemed a
“Covered Termination” (and the Executive’s
Termination Date shall be the date of such termination of
employment) and any such termination and cancellation of this
Agreement unless effected in the manner specified in Section 19
hereof, shall be null and void unless it shall be reasonably
demonstrated by the Company that such termination of employment or
termination and cancellation of this Agreement (i) shall not have
been at the request of a third party who had taken steps reasonably
calculated to effect a Change in Control of the Company or (ii)
shall not otherwise have arisen in connection with or in
anticipation of a Change in Control of the Company.
3.
Employment Period . If a Change in Control of the
Company occurs when the Executive is employed by the Company or a
subsidiary of the Company, the Company will, or will cause the
Employer to, continue thereafter to employ the Executive during the
Employment Period, and the Executive will remain in the employ of
the Employer in accordance with and subject to the terms and
provisions of this Agreement. Any termination of the
Executive’s employment during the Employment Period, whether
by the Company or the Employer, shall be deemed a termination by
the Company for purposes of this Agreement.
4.
Duties . During the Employment Period, the
Executive shall, in the same capacities and positions held by the
Executive at the time of the Change in Control of the Company or in
such other capacities and positions as may be agreed to by the
Company and the Executive in writing, devote the Executive’s
best efforts and all of the Executive’s business time,
attention and skill to the business and affairs of the Employer, as
such business and affairs now exist and as they may hereafter be
conducted. The services which are to be performed by the
Executive hereunder are to be rendered in the same metropolitan
area in which the Executive
was employed during the 180-day
period prior to the time of such Change in Control of the Company,
or in such other place or places as shall be mutually agreed upon
in writing by the Executive and the Company from time to
time. Without the Executive’s consent the
Executive shall not be required to be absent from such metropolitan
area more than 45 days in any fiscal year of the
Company.
5.
Compensation . During the Employment Period, the
Executive shall be compensated as follows:
(a) The
Executive shall receive, at reasonable intervals (but not less
often than monthly) and in accordance with such standard policies
as may be in
