EXHIBIT
10.42
MGE ENERGY,
INC.
____________________________________________________________________________
__________
PERFORMANCE UNIT AWARD AGREEMENT (5-Year)
Name of
Employee :
______________________
Number of
Units: ______________________
Grant
Date: ______________________
THIS PERFORMANCE UNIT
AGREEMENT (the “ Agreement
”) is made by and between MGE ENERGY, INC., a corporation
organized and existing under the laws of the State of Wisconsin
(the “ Company ”), and the employee named above
(the “ Participant ”), as of the date designated
above (the “ Grant Date ”). This Agreement
provides notice of the terms and conditions applicable to a grant
of Performance Units made pursuant to the Company’s 2006
Performance Unit Plan (the “ Plan ”). By
execution below, the Participant agrees to be bound by the terms
and conditions described herein and the provisions of the Plan.
Unless otherwise defined below or in Exhibit 1 attached hereto and
made a part hereof, capitalized terms have the meanings ascribed to
them in the Plan, a copy of which is being delivered with this
Agreement.
1.
Grant of Performance
Units . As of
the Grant Date, the Board of Directors of the Company (the “
Board ”) grants to the Participant an aggregate of the
Units indicated above, each of which gives the recipient the right
to receive the Unit Value, equal to the Fair Market Value plus
Dividend Equivalents declared during the relevant Vesting Period,
subject to the restrictions described herein. Such Units do not
represent real shares of stock, shall not be sold, assigned,
transferred, pledged or hypothecated and have no value other than
the cash settlement rights ascribed to them in the Plan (the
“ Units ”).
2.
Performance
Period, Vesting and Settlement .
(a)
Performance
Period. The
Performance Period with respect to this grant of Performance Units
shall be the 12 months ended December 31,
(the “ Performance Period ”).
(b)
Vesting.
Subject to Section 5
hereof, Performance Units granted with respect to the Performance
Period shall vest according to the following schedule:
Date
%
Vest
December 31,
0%
December 31,
0%
December 31,
60%
December 31,
80%
December 31,
100%
(c)
Settlement
. Units shall be valued
and settled in cash on the Settlement Date, in accordance with the
Plan.
3.
Dividend
Equivalents. Unit Value of the Performance Units
includes Dividend Equivalents for all dividends declared by the
Company during the Vesting Period. For purposes of computing Unit
Value, such dividends shall be considered in aggregate but shall
not be deemed to be reinvested in the Company’s Stock or to
earn interest throughout the Performance Period.
4.
Termination of
Employment .
(a)
Death, Disability or
Retirement .
If the Participant’s employment with the Company is
terminated due to the Participant’s death, Disability or
Retirement, the Participant shall receive an additional year of
vesting credit with respect to the Units, and all vested Units
shall be settled in accordance with the Plan on the appropriate
Settlement Date following the conclusion of the full Vesting
Period. Specifically, such a Participant shall receive, as
applicable, (i) if the Participant’s Termination Date occurs
prior to December 31 of a calendar year, vesting credit with
respect to such calendar year or (ii) if the Participant’s
Termination Date occurs on December 31 of a calendar year, vesting
credit with respect to the calendar year immediately following the
calendar year which includes such Termination Date.
(b)
Voluntarily by the
Participant or by Company without Cause . If the Participant voluntarily
terminates employment with the Company or the Company terminates
the Participant without Cause, in either case prior to the
conclusion of the full Vesting Period, all unvested Units
(determined as of the Termination Date) shall be immediately
forfeited and all of the Participant’s vested Units shall be
settled in accordance with the Plan on the appropriate Settlement
Date following conclusion of the full Vesting Period.
(c)
Termination by
Company for Cause . If the Participant’s
employment with the Company is terminated for Cause, all vested and
unvested Units shall be immediately forfeited without settlement or
payment of value.
5.
Change in
Control .
Upon the occurrence of a Change in Control (as defined in Exhibit
1), all Units not previously forfeited shall become immediately
vested and shall be settled in accordance with the Plan on the
appropriate Settlement Date following the conclusion of the full
Vesting Period.
6.
No Assignment of
Units .
During the Vesting Period, Units granted hereunder shall not be
subject in any manner to sale, transfer, pledge, assignment,
encumbrance, division or other disposition, whether by operation of
law or otherwise and whether voluntarily or involuntarily,
including any division of property incident to a divorce or other
allocation of marital property.
7.
Adjustment
. During the Vesting
Period, the aggregate number of Units granted hereunder shall be
subject to adjustment (as determined by the Compensation Committee
in its sole discretion) due to any stock split, stock dividend or
other form of recapitalization which affects the Company’s
outstanding Stock.
8.
Employment
Rights .
Neither this Agreement nor the grant of Units hereunder shall be
deemed to confer on the Participant any right to continue in the
employ of the Company or any affiliate or to interfere, in any
manner, with the right of the Company to terminate employment,
whether with or without Cause, in its sole disc
