Exhibit 10c(13)
EXHIBIT A
TO
2002 EQUITY INCENTIVE PLAN
PERFORMANCE SHARE SUB-PLAN
(Effective January 1, 2005)
This
Performance
Share Sub-Plan ("Sub-Plan") sets forth the rules and
regulations adopted by the Committee for
issuance of
Performance Share
Awards
under Section 10 of the 2002 Equity
Incentive Plan ("Plan"). These rules and
regulations shall apply to Awards granted effective on and after January 1,
2005. In addition, the rules and regulations relating
to the deferral of Awards
set forth in this Sub-Plan shall apply to any Awards which
become vested on or
after January 1, 2005. Capitalized terms used in this Sub-Plan that are not
defined herein shall have the meaning
given in the Plan.
In the event of
any
conflict between this Sub-Plan and the Plan,
the terms and
conditions of the
Plan shall control. No Award Agreement shall be
required for
participation in
this Sub-Plan.
Section 1. Definitions
When used in this Sub-Plan, the following terms shall have the meanings as
set
forth below, and
are in addition to the definitions set forth in the Plan.
1.1 "Account" means the account used to record and track the number of
Performance
Shares granted to each Participant as provided in Section 2.4.
1.2 "Award" as used in this Sub-Plan
means each aggregate
award of Performance
Shares as
provided in Section 2.2.
1.3 "EBITDA" means earnings before interest, taxes, depreciation, and
amortization as
determined from time to time by the Committee.
1.4 "EBITDA Growth" means the percentage increase (if any) in EBITDA for
any
Year, as
compared to the previous Year as determined from time to time by
the
Committee.
1.5 "Peer Group" means the peer group
of utilities
designated by the Committee
prior to the
beginning of the Performance Period for which an Award is
granted.
1.6 "Performance Period" for purposes of this
Sub-Plan means three consecutive
Years beginning
with the Year in which an Award is granted.
1.7 "Performance Schedule" means Attachment 1 to this Sub-Plan, which sets
forth the
Performance Measures applicable to this Sub-Plan.
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1.8 "Performance Share" for purposes of this Sub-Plan means each unit of an
Award granted to
a Participant, the value of which is equal to the value of
Company Stock as
hereinafter provided.
1.9 "Retire" or "Retirement" means
termination of employment on or after:
(a) becoming 65 years old with at
least 5 years of service;
(b) becoming 55 years old with at
least 15 years of service; or
(c) achieving at least 35 years of
service, regardless of age.
1.10 "Salary" means the regular base rate
of compensation payable by the Company
to a Participant
on an annual basis.
Salary does not include bonuses, if
any, or
incentive
compensation, if any.
Such compensation shall not be
reduced by any
deferrals made under any other plans or programs maintained
by the
Company.
1.11 "Total Shareholder Return" means the total percentage
return realized by
the owner of a
share of stock during a relevant Year or any part thereof.
Total
Shareholder
Return is equal to the
appreciation or
depreciation in
value of the
stock (which is equal to the closing value of the stock on the
last
trading day of the
relevant period minus the closing value of the
stock on the
last trading day of
the preceding
Year) plus the
dividends
declared
during the relevant
period, divided by the closing value of
the
stock on the
last trading day of the preceding Year.
1.12 "Year" means a calendar year.
Section 2. Sub-Plan Participation and
Awards
2.1 Participant Selection. Participants under this Sub-Plan
shall be selected
by the
Committee in its sole
discretion as provided
in Section 4.2 of the
Plan.
2.2 Awards. Subject to any adjustments to be made under Section 2.5, the
Compensation
Committee may, in its sole discretion, grant Awards to some or
all of the
Participants
in the form of a
specific number of
Performance
Shares.
The target and maximum value of any Award granted to any
Participant in
any calendar Year will be based upon the following:
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Participant
Target Award
Maximum Award
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CEO*
290% of Salary
362.5% of Salary
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COO*
200% of Salary
250% of Salary
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Presidents*/Executive VPs* 133% of
Salary
166.25% of Salary
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Senior VPs*
110% of Salary
137.5% of Salary
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VP/Department
Heads**
Level I
100% of Salary
125% of Salary
Level II
80% of Salary
100% of Salary
Level III
60% of Salary
75% of Salary
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Key
Managers**
Level I
25% of Salary
31.25% of Salary
Level II
15% of Salary
18.75% of Salary
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* Senior Management Committee level
position
** Levels shall
be determined in the sole discretion of the Committee
2.3 Award Valuation at Grant. In
calculating the value of an Award for purposes
of Section 2.2,
the value of each
Performance Share
shall be equal to the
closing
price of a share of
Stock on the last trading day of the Year
before the
Performance Period
begins. The
Participant's
Salary shall be
determined as of
the January 31 preceding the date the Award is granted, or
such other time
as is determined in the discretion of the Committee. Each
Award
is deemed to be granted on the day that it is approved by the
Committee.
2.4 Accounting and Adjustment of Awards. The number of Performance Shares
awarded to a
Participant shall be
recorded in a separate
Account for each
Participant.
The number of
Performance Shares
recorded in a Participant's
Account shall be
adjusted to reflect any splits or other adjustments in the
Stock.
If any cash dividends are paid on the Stock, the number of
Performance
Shares in each
Participant's
Account shall be
increased by a
number equal to
(i) the dividend
multiplied by the
number of
Performance
Shares in each
Participant's Account,
divided by (ii) the closing price of
a share of Stock
on the payment date of the dividend. No adjustment shall
be made
to any outstanding Awards of a Retired Participant for cash
dividends
paid on Stock during the Performance Period following the
Retirement of
the Participant.
2.5 Performance Schedule and Calculation of Awards. Except as otherwise
provided, each
Award shall become vested on January 1 immediately following
the end of the
applicable
Performance
Period, subject to adjustment in
accordance with
the following procedure:
(a) One-half of the Award shall be
adjusted as follows:
(i) The Total
Shareholder Return for
the Company shall be determined
for each Year during the Performance Period, and shall then be
averaged (the "Company TSR").
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(ii) The average Total Shareholder Return for the Peer Group
utilities
shall be determined for each Year during the Performance
Period,
and shall then be
averaged ( the "Peer Group TSR"). The two
highest and two lowest performing utilities within the Peer
Group
shall be excluded for purposes of determining the Peer Group
TSR.
(iii)The Peer
Group TSR for the Performance Period shall be
subtracted from the Company TSR for the Performance Period. The
remainder shall then
be used to determine
the number of
vested
Performance Shares
using the Performance Schedule, based on
one-half of the number of Performance Shares in the
Participant's
Account.
(b) The other one-half of the Award
shall be adjusted as follows:
(i) The EBITDA Growth
for the Company shall
be determined
for each
Year during the
Performance Period,
and shall then be
averaged
(the "Company EBITDA Growth").
(ii) The average EBITDA Growth for the Peer Group utilities shall be
determined for each Year during the Performance period, and
shall
be averaged (the "Peer Group EBITDA Growth"). The two highest
and
two lowest performing
utilities within the Peer Group shall be
excluded for
purposes of determining the Peer Group EBITDA
Growth.
(iii)The Peer Group EBITDA Growth for the Performance Period shall be
subtracted from the
Company EBITDA
Growth for the
Performance
Period. The remainder
shall then be used to determine the number
of vested Performance
Shares using the Performance Schedule,
based on one-half
of the number of Performance Shares in the
Participant's Account.
(c) The total number of vested Performance Shares payable to the
Participant shall be
the sum of the amounts
determined in accordance
with subsections (a) and (b) above.
(d) The Performance Measures and the Performance
Schedule will not change
during any Performance
Period with regard to any Awards that have
already been granted.
The Committee
reserves the right to
modify or
adjust the
Performance Measures and/or the Performance Schedule in the
Committee's sole discretion with regard to future grants.
2.6 Payment Options. Except as provided in Section 3, Awards shall be paid
after
expiration
of the Performance Period. The Company will issue one
share of Stock
in payment for each Performance Share (rounded to the
nearest
whole Performance Share) credited to the Account of the
Participant.
Payment shall be made as follows:
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(a) 100% during the month of April of the Year immediately following
expiration of
the Performance Period, or as soon as practical
thereafter; or
(b) in accordance with an alternative
payment election made by Participant
substantially in the
form attached
hereto as Attachment
2, provided
that such election is executed by the Participant and returned to
the
Vice President, Human
Resources Department no later than the end
of
the first Year of the Performance Period. Once made, this election
is
irrevocable. A deferral election may only be made by a Participant
who
is employed as a Departm
