EXHIBIT
10.41
MGE ENERGY,
INC.
2006 PERFORMANCE UNIT
PLAN
MGE ENERGY,
INC.
2006 PERFORMANCE UNIT
PLAN
1.
Purpose; Effective
Date
The purpose of the 2006
Performance Unit Plan (the “ Plan ”) of MGE
Energy, Inc. and its subsidiaries and affiliates (the “
Company ”) is to attract, retain and motivate key
employees by providing those employees incentives and reward for
performance at the Company. This Plan is effective January 1, 2007,
the first date on which any Awards (as defined below) were issued
under the Plan, and amends and restates in its entirety the version
of the Plan originally adopted by the Company on December 29, 2006.
Capitalized terms not defined herein shall have the meanings
ascribed to them in Section 2 below.
2.
Definitions
The following terms
used in the Plan shall have the meanings set forth
below:
“
Administrator ” means the person or persons, if any,
to whom the Committee has delegated authority to administer the
Plan.
“ Award
” means an award of Performance Units made to a
Participant.
“ Award
Agreement ” means a written agreement setting forth the
terms and conditions of the Award made under the Plan.
“ Board
” means the Company’s Board of Directors.
“ Cause
” means “cause” as defined in the
Participant’s employment agreement, or in the absence of such
definition, shall mean the Participant’s: (i) continued
failure to obey reasonable instructions of the person(s) to whom
the Participant reports; (ii) continued neglect of duties and
responsibilities; (iii) willful misconduct or other actions in bad
faith which are to the Company’s detriment; (iv) breach of
any material covenant with the Company by which employee is bound,
including without limitation any confidentiality, intellectual
property or non-solicitation agreements with the Company (including
without limitation the provisions contained herein), or (v)
violation of any provision of the Company’s written code of
conduct.
“
Committee ” means the Compensation Committee appointed
by the Board to administer the Plan pursuant to the provisions of
Section 3 of the Plan.
" Disability
” means the definition of Disability in the Company’s
Long-Term Disability Plan, or in the absence of such a definition,
the Participant’s inability, due to mental or physical
incapacity, to substantially perform the duties of the
Participant’s employment for 180 consecutive days, and which
impairment is determined to be total and permanent by a physician
selected by Company or its insurers and reasonably acceptable to
the Participant or the Participant’s legal
representative.
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“ Dividend
Equivalent ” means a right, granted under this Plan, to
receive the cash equivalent of all or a specified portion of the
dividends declared and paid with respect to one share of the
Company’s Stock during the Vesting Period which applies to an
award of Performance Units. Dividend Equivalents shall not be
deemed reinvested in the Company’s Stock, and shall be paid
to the Participants on the appropriate Settlement Date.
“ Fair Market
Value ” means the fair market value of Stock as
determined in good faith by the Committee or under procedures
established by the Committee. Unless otherwise determined by the
Committee, the Fair Market Value of Stock shall be the
officially-quoted closing selling price of the stock or if no
selling price is quoted the bid price on the NASDAQ or other
principal stock exchange or market on which Stock is traded on the
day immediately preceding the day as of which such value is being
determined or, if there is no sale on that day, then on the last
previous day on which a sale was reported.
“ Grant
Date ” means the date upon which an award of Performance
Units are granted to a Participant.
“ Performance
Period ” means any relevant period designated by the
Committee with respect to any Award.
“ Performance
Unit ” or “ Unit ” means a right
granted to a Participant to receive a cash settlement equal to the
Unit Value, as determined by the Committee.
“ Plan
” means this MGE 2006 Performance Unit Plan.
“
Retirement ” means any normal (or approved early
retirement) by a Participant pursuant to the terms of any pension,
profit sharing or 401(k) plan, or Company policy applicable to a
Participant on the Termination Date.
“ Settlement
Date ” means the date upon which cash is paid to a
Participant in full settlement of vested Performance Units for
which the relevant Vesting Period has been completed. The Committee
shall ensure that the Settlement Date occurs within 90 days
following the completion of the relevant Vesting Period.
“ Stock
” means the Company’s common stock, par value $1.00 per
share as traded on the NASDAQ or other principal stock exchange or
market on which Stock is traded.
“ Termination
Date ” means, with respect to a Participant, the final
date of the Participant’s employment with the
Company.
“ Unit
Value ” means, as calculated on the measurement date, the
sum of (i) the Fair Market Value of the Company’s Stock, plus
(ii) an amount equal to the aggregate value of all Dividend
Equivalents declared on the Stock during the relevant Vesting
Period.
“ Vesting
Period ” means the duration of time ending on December 31
of a calendar year over which a Performance Award becomes 100%
vested.
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3.
Administration
3.1
Committee
Authority .
Unless otherwise determined by the Board and subject to the
provisions of the Plan, the Committee and the Administrator
(subject to the Committee’s ability to restrict the
Administrator) shall have the authority and full discretionary
power to: (i) establish eligible Participants, and make Awards;
(ii) determine the size of Awards as specified herein; (iii)
administer, construe and interpret the Plan; (iv) prescribe, amend
and rescind rules and regulations, agreements, terms, and notices
hereunder (but not unilateral modifications to existing awards
without the Participant’s written consent); and (v) make all
other determinations necessary or advisable in its discretion for
the administration of the Plan. Any actions of the Committee with
respect to the Plan shall be conclusive and binding upon all
persons interested in the Plan. The Committee and Administrator may
each appoint agents and delegate authority as advisable to
administer the Plan.
3.2
Administrator
. An Administrator may
be appointed by, shall remain in office at the will of, and may be
removed with or without reason by, the Committee. The Administrator
may resign at any time. The Administrator shall not be entitled to
act on or decide any matter relating solely to himself or herself
or any of his or her rights or benefits under the Plan. The
Administrator shall not receive any special compensation for
serving in his or her capacity as Administrator but shall be
reimbursed for any reasonable expenses incurred in connection
therewith. No bond or other security need be required of the
Administrator in any jurisdiction.
3.3
Limitation of
Liability .
In the exercise of authority under the Plan, each Committee member
(or Administrator) shall be entitled in good faith to rely or act
upon any report or other information furnished to him or her by any
employee of the Company, the Company’s independent certified
public accountants, or any executive compensation consultant, legal
counsel, or other professional retained by the Company to assist in
the administration of the Plan. No Committee member, Administrator,
or executive shall be personally liable to the Company or to any
participant in the Plan for any action, determination, or
interpretation taken or made in good faith with respect to the
administration of this Plan, and each such person shall be fully
indemnified and the Company and the participants in the Plan waive
their rights with respect to any such liability.
4.
Participation
Participants must be
Company employees to be eligible to participate in the Plan
(“ Participants ”). The Committee shall have
sole discretion to designate eligible employees who may participate
in the Plan, which shall be determined based on a
Participant’s performance against goals established by the
Committee and the CEO for the immediately preceding year.
Participation in this Plan in one Performance Period neither
guarantees nor precludes participation in any subsequent
Performance Period.
5.
Performance
Awards
5.1
General
. Awards may be granted
on the terms and conditions set forth in this Section 5. In
addition, the Committee may impose on any Award or the exercise
thereof, at the date of grant or thereafter, such additional terms
and conditions, not inconsistent with the provisions of the Plan,
as the Committee shall determine, including terms requiring
forfeiture of Awards in the event of termination of employment or
service by the Participant and terms permitting a Participant to
make elections relating to his or her Award. The Committee shall
retain full power and discretion with respect to any term or
condition of an Award that is not mandatory under the Plan. The
Committee shall require the payment of lawful consideration for an
Award to the extent necessary to satisfy the requirements of
applicable corporate law of the State of Wisconsin.
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5.2
Size of Awards;
Limitation .
Awards shall be targeted at 20% of a Participant’s base
salary, as determined by the Committee using the Fair Market Value
of the Company’s Stock on the Grant Date. With respect to
Awards for any Performance Period, the maximum Award made to any
Participant shall not exceed 30% of that Participant’s base
salary, as measured on the Grant Date.
5.3
Award
Agreements .
The Committee may grant an Award
