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Exhibit 10.5
INTEGRYS ENERGY GROUP, INC.
PERFORMANCE
STOCK RIGHT AGREEMENT
THIS AGREEMENT is entered
into as of May 17, 2007 , (the “Grant
Date”), by and between INTEGRYS ENERGY GROUP,
INC. (the
“Company”), and __________________
____________________ (the
“Participant”). This Agreement sets
forth the terms, rights and obligations of the parties with
respect to the grant of Performance Stock Rights to the
Participant. This agreement shall not become
effective until the Participant signs and returns the
“Acknowledgement Form” attached
hereto.
The Performance Stock Rights
are granted under, and are subject to, the terms of the
Integrys Energy Group, Inc. 2007 Omnibus Incentive
Compensation Plan (the “Plan”), which are
specifically incorporated by reference in this
Agreement. Any capitalized terms used in this
Agreement which are not defined shall have the meaning set
forth in the Plan.
The parties to this
Agreement covenant and agree as follows:
1.
Grant
of Performance Stock Rights . (a)
Subject
to the terms of this Agreement, the Company grants to the
Participant Performance Stock Rights representing the right to
receive ______ shares (“Target Award”), of the common
stock of the Company, par value $1.00 (“Stock”), in the
event certain Performance Goals specified herein are
satisfied. The Participant obtains no ownership interest
in the Company and will not be considered a shareholder of the
Company by virtue of the grant of Performance Stock Rights
hereunder until such time as Stock may be issued to the Participant
as a Final Award.
(b)
In the event of certain corporate
transactions described in Section 12 of the Plan, the number of
Performance Stock Rights will be adjusted by the Compensation
Committee of the Board of Directors of the Company (the
“Committee”). The Committee’s
determination as to any adjustment shall be
final.
2.
Performance
Period .
Subject to the provisions of Section 7, the period from April
1, 2007 to December 31,
2009.
3.
Performance
Measures .
(a)
Total
Shareholder Return (“TSR”) . The quotient
obtained by dividing (1) the Shareholder Return with respect to a
share of common stock of the Company
, by (2) the
Beginning Market Price of a share of common stock
of the Company
. For this
purpose:
(1)
The Shareholder
Return means the cash dividends paid on a share of common stock
during the Performance Period, increased by (if positive) or
reduced by (if negative) the change in stock price from the
Beginning Market Price of a share of common stock to the Ending
Market Price of a share of common stock.
(2)
The Beginning Market
Price of a share of common stock is the average closing market
price of a share of common stock for the 30 trading days
immediately preceding the first day of the Performance Period as
reported by the securities exchange on which such stock is
principally traded.
(3)
The Ending Market
Price of a share of common stock is the average closing market
price of a share of common stock for the 30 trading days
immediately preceding the last day of the Performance Period as
reported by the securities exchange on which such stock is
principally traded.
(b)
Comparison
Group . All of the companies
included in the Towers Perrin database of publicly traded electric
power companies.
4.
Determination
of Final Awards .
(a)
Presumptive
Award . As soon as
practicable following the completion of the Performance Period, the
Committee will determine the TRS of the Company and of each company
in the Comparison Group. The Committee’s determination will
be final and binding on all persons. The
Participant’s presumptive award shall be determined in
accordance with the following table; provided that any fractional
share of Stock that would otherwise result from the foregoing
calculation shall be disregarded.
|
Company TSR In
Relation to
TSR of All Comparison
Group
Companies
|
Presumptive Award
Equal to
the Following
Percentage of
the
Target Award*
|
| |
|
| 90
th Percentile or
Greater |
200% |
| 75
th Percentile |
150% |
| 50
th Percentile |
100% |
| 25
th Percentile |
50% |
| Below the 25
th Percentile |
0%
|
* The Presumptive
Award for performance between points on the payout schedule would
be interpolated.
(b)
Final
Award . The Presumptive
Award is used as a guideline for the Committee in determining the
Final Award to be made to the Participant, and the Participant
obtains no rights as a result of the determination of the
Presumptive Award. In determining the Final Award to be
made to the Participant, the Committee, in its sole discretion, may
increase or decrease the amount of the Presumptive Award; provided
that the Committee will not increase the amount of the Presumptive
Award applicable to the Participant if the Final Award is intended
to comply with Section 162(m) of the Internal Revenue Code and if
the Participant is a Covered Executive (as defined in the Plan) for
purposes of Section 162(m) of the Internal Revenue
Code.
Except with respect to the
portion (if any) of the Final Award payment of which is deferred in
accordance with the Integrys Energy Group, Inc. Deferred Compensation Plan, the
Final Award will be distributed to the Participant by March 15 of
the calendar year following the calendar year in which the
Performance Period ends..
5.
Dividend
Equivalents . The Participant
shall not receive any cash or other consideration to reflect
dividends that would have been paid or accrued had the Performance
Stock Rights been actual shares of Stock during the Performance
Period.
6.
Effect
of Termination of Employment .
(a)
Except as set forth
in subsection (b) below and Section 8 below, or as otherwise
determined by the Committee, the Performance Stock Rights will be
cancelled immediately and without notice to the Participant, and no
Final Award will be made, in the event of the Participant’s
termination of employment from the Company and its Affiliates prior
to the last day of the Performance Period.
(b)
The Participant’s
Performance Stock Rights will not be cancelled upon termination of
employment, and the Participant (or the Partici
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