EXHIBIT 10.02
AMENDED AND RESTATED
EFFECTIVE AS OF JANUARY 1, 1998
NORTHERN STATES POWER COMPANY
EXECUTIVE LONG-TERM INCENTIVE AWARD STOCK PLAN
SECTION 1. PURPOSE. The general purpose of the Northern
States Power Company Executive Long-Term Incentive Award Plan
(the "Plan") is to create a compensation environment which will
attract and retain talented officers and key employees of
Northern States Power Company, a Minnesota corporation (the
"Company") and its subsidiaries, by providing to employees
determined to be eligible "("Participants") with common stock of
the Company ("Common Stock") pursuant to awards ("Awards")
described herein.
The specific purposes of the Plan are to:
(a) Provide a total compensation program which is competitive
with general industry programs and also those emerging in the
leading utility companies.
(b) Use a stock based long-term incentive plan to more closely
align the interest of NSP's executives with those of the
shareholders and to maintain NSP's long-term financial strength
so that NSP can take advantage of opportunities that will allow
it to provide quality service at the lowest cost possible.
(c) Provide another element of compensation beyond base salary
and annual incentive pay to focus attention on long-term business
goals and to reward superior company performance.
(d) Encourage teamwork and the spirit of cooperation along the
executive group.
SECTION 2. COMMITTEE. The Plan shall be administered by
the Corporate Management Committee of the Company's Board of
Directors ( the "Committee" ) or any committee designated as its
successor for purposes of this Plan. The Committee shall consist
of not less than three members of the Board of Directors who are
not employees of the Company and all members of the Committee
shall be "disinterested persons" as defined in Rule 16b-3 of the
General Rules and Regulations under the Security Exchange Act of
1934. To the extent required to comply with the performance-
based compensation exemption under Internal Revenue Code ("Code")
Section 162(m) and the related regulations, each member of the
Committee shall qualify as an "outside director" as defined
therein.
SECTION 3. COMMITTEE POWERS AND DUTIES. The Committee shall
have the authority to make rules and regulations governing the
administration of the Plan; to select the eligible employees to
whom Awards shall be granted; to determine the type, amount, size
and terms of Awards; to determine the time when Awards shall be
granted; to determine whether any restrictions shall be placed on
shares of Common Stock granted pursuant to any Awards; to
authorize the Company to make available loans, on specified
terms, to Participants for the purpose of providing funds for the
use of Participants in exercising options granted under the Plan;
and to make all other determinations necessary or advisable for
the administration of the Plan. The Committee's determination
need not be uniform, and may be made selectively among persons
who are eligible to receive Awards under the Plan, whether such
persons are similarly situated. All interpretations, decisions,
or determinations made by the Committee pursuant to the Plan
shall be final and conclusive.
SECTION 4. PARTICIPANTS. Participants will consist of such
key employees (including officers) of the Company or any of its
present or future subsidiaries as the Committee, in its sole
discretion, determines to be mainly responsible for the success
and future growth and profitability of the Company and whom the
Committee may designate from time to time to receive Awards under
the Plan. Awards may be granted under this Plan to persons who
have previously received Awards or other benefits under this or
other plans of the Company.
SECTION 5. AWARDS. Awards may consist of Common Stock
transferred to Participants, subject to restrictions as
described in Section 6, as additional compensation for service
rendered to the Company without any other payment therefor
provided that the value of the Common Stock awarded by the
Committee to any Participant in a calendar year shall not exceed
$1,000,000. The Committee also may make Awards in the form of
stock options, stock appreciation rights, performance awards, or
any combination of the foregoing provided that the Committee
shall not award rights or options to purchase more than 100,000
shares to any Participant in a calendar year. Awards granted
under the Plan in any calendar year cannot exceed one percent
(1%) of the number of outstanding shares of Common Stock at the
end of the previous calendar year. Solely for the purpose of
computing the number of shares of Common Stock granted under
this Plan, there shall not be counted any shares that have been
forfeited. The stock awarded may be previously unissued or
stock repurchased by the Company for purposes of this Plan as
designated by the Board of Directors. If there is any change in
the outstanding Common Stock by reason of a stock dividend or
distribution, stock split-up, recapitalization, combination or
exchange of shares, or by reason of merger, consolidation or
other corporate reorganization in which the Company is the
surviving corporation, the number of shares of Common Stock
available for Awards under the Plan shall be adjusted by the
Committee to give proper effect to such change.
SECTION 6. RESTRICTED STOCK.
(a) AWARDS. All Awards shall consist of restricted
shares of Common Stock granted pursuant to the Plan and
shall entitle the Participant to receive the shares of
Common Stock, subject to forfeiture if specified
conditions are not satisfied, at the end of a specified
period. The shares of Common Stock awarded shall be
subject to such terms and conditions as the Committee
shall from time to time approve; provided, that each
Award shall be subject to the requirements of this
Section 6. Awards of restricted stock shall be
determined by the Committee utilizing performance goals
based on one or more of the following: earnings per
share, market share, stock price, sales, costs, net
operating income, cash flow, retained earnings, return
on equity, total shareholder return, shareholder value
analysis, results of customer satisfaction surveys,
aggregate product price and other product price
measures, safety record, service reliability, demand-
side management (including conservation and load
management), operating and maintenance cost management,
energy production availability, and individual
performance measures; provided, that all Performance
Goals shall be objective performance goals satisfying
the requirements for "performance-based compensation"
within the meaning of Section 162(m)(4) of the Code.
Such Performance Goals also may be based on the
attainment of specified levels of performance of the
Company and/or any Affiliates under one or more of the
measures described above relative to the performance of
other corporations.
(b) RESTRICTED PERIOD. The Committee shall establish a
period (the "Restricted Period") of not less than one
year nor more than five years, commencing on the date
of award, during which the Participant will not be
permitted to sell, transfer, pledge, encumber, or
assign the Common Stock subject to the Award. Within
these limits, the Committee may provide for the lapse
of restrictions in installments or upon the occurrence
of certain events where deemed appropriate. Any
attempt by a Participant to dispose of restricted
shares of Common Stock in a manner contrary to the
applicable restrictions shall be void, and of no force
and effect.
(c) RIGHTS DURING RESTRICTED PERIOD. Except to the extent
otherwise provided in this Section 6 or under the terms
of any restricted stock agreement during the Restricted
Period, the Participant shall have all of the rights of
a stockholder in the Company with respect to the
restricted shares of Common Stock, including the right
to vote the shares and to receive dividends and other
distributions with respect to the shares unless the
Committee shall otherwise determine; provided, that all
stock dividends, stock rights, and stock issued upon
split-ups or reclassification of shares shall be
subject to the same restrictions as the rights, or
additional stock are issued, and may be held in custody
as provided hereafter in this Section 6 until the
restrictions thereon shall have lapsed.
(d) FORFEITURES. Except to the extent otherwise provided
in the restricted stock agreement, if the Participant
shall cease to be an employee of the Company or any
subsidiary, or if any condition established by the
Committee for the release of any restrictions shall not
have occurred, prior to the expiration of the
Restricted Period, all shares of Common stock then
subject to any restrictions shall be forfeited to the
Company without any further obligations of the Company
to the Participant, and all rights of the Participant
with respect to such shares shall terminate.
(e) CUSTODY. Restricted shares may be held in custody by
the Company in an account allocated to the Participant
until restrictions applicable to thereto have expired.
The Committee may require that any certificates
evidencing restricted shares of Common Stock be held in
custody by a bank or other institution, or by the
Company or any subsidiary, until the restrictions
thereon have lapsed. If any certificates are issued
for shares still subject to restrictions, the
Participant awarded such shares shall deliver to the
Company a stock power, endorsed in blank, relating to
the restricted shares as a condition of receiving the
Award.
(f) CERTIFICATES. Subject to paragraph (e) above, if a
recipient of restricted shares pursuant to an Award
shall be issued a certificate or certificates
evidencing the shares of Common Stock subject to the
restrictions provided as to the applicable Award, such
certificates shall bear an appropriate legend referring
to the terms, conditions, and restrictions applicable
to the Award, which legend shall be substantially in
the following form:
"The transferability of this certificate
and the shares represented hereby are
subject to the terms and conditions
(including forfeiture) of the Northern
States Power Company Executive Long-Term
Incentive Award Stock Plan and an
Agreement entered into between the
registered owner and Northern States
Power Company, a Minnesota corporation.
Copies of such Plan and Agreement are on
file in the office of the Secretary,
Northern States Power Company, 414
Nicollet Mall, Minneapolis, Minnesota."
(g) GIFT TO DEPENDENT. Notwithstanding any provision of
this Section 6, the Committee may permit a gift of
restricted shares to the Participant's spouse, child,
stepchild, grandchild, or legal dependent, or to a
trust whose sole beneficiary or beneficiaries shall be
the Participant and/or any one or more of such persons;
provided, that the donee shall have entered into an
agreement with the Company pursuant to which the donee
agrees that the restricted shares of Common Stock shall
be subject to the same restrictions as they were prior
to the donation by the Participant.
SECTION 7. STOCK OPTIONS. A stock option granted pursuant to
the Plan shall entitle the optionee, upon exercise, to purchase
shares of Common Stock at a specified price during a specified
period. Such options will be "nonqualified" for the purposes of
Section 422A of the Internal Revenue Code. Options shall be
subject to such terms and conditions as the Committee shall from
time to time approve; provided, that each option shall be subject
to the following requirements:
(a) TYPE OF OPTION. Each option shall be identified in the
agreement pursuant to which it is granted as a nonqualified
option.
(b) TERM. No option shall be exercisable more than 121
months after the date on which it is granted.
(c) PAYMENT. The purchase price of shares of Common Stock
subject to an option shall be payable in full at the time the
option is exercised. Payment may be made in cash, in shares of
Common Stock having a fair market value which is not less than
the option price on the date of exercise, or by a combination of
cash and such shares, or any other consideration in kind,
including shares of restricted stock, as the Committee may
determine, and subject to such terms and conditions as the
Committee deems appropriate.
(d) OPTIONS NOT TRANSFERABLE. Options shall not be transferable
except to the extent permitted by the agreement evidencing such
option; provided, that in no event shall any option be
transferable by the optionee, other than by will or the laws of
descent and distribution, and shall be exercisable during an
optionee's lifetime only by such optionee. If, pursuant to the
agreement evidencing any option, such option remains exercisable
after the optionee's death, to the extent permitted by such
agreement, it may be exercised by the personal representative of
the optionee's estate or by any person who acquired the right to
exercise such option by bequest, inheritance, or otherwise by
reason of the optionee's death.
Subject to the foregoing, options may be made exercisable in one
or more installments, upon the happening of certain events, upon
the fulfillment of certain conditions, or upon such other terms
and conditions as the Committee shall determine.
SECTION 8. STOCK APPRECIATION RIGHTS. A stock appreciation
right granted pursuant to the Plan shall entitle the holder, upon
exercise, to receive a payment equal to the amount by which the
fair market value of one share of Common Stock (as determined by
the Committee) on the date the right is exercised exceeds the
"base amount" established by the Committee for such right on the
date it was granted. Stock appreciation rights shall be subject
to such terms and conditions as the Committee shall from time to
time approve; provided, that each right shall be subject to the
following requirements:
(a) TYPE OF RIGHT. A stock appreciation right may be granted in
tandem with an option granted pursuant to the Plan, or as a
"freestanding" right not in tandem with an option.
(b) TANDEM RIGHTS. Any option granted in tandem with a stock
appreciation right shall become nonexercisable upon the exercise
of the related right, and any right granted in tandem with an
option shall become nonexercisable upon exercise of the related
option. Shares of Common Stock subject to an option which
becomes nonexercisable by virtue of the exercise of a tandem
right shall not be available for subsequent awards under the
Plan.
(c) TERM. No stock appreciation right shall be exercisable
more than 121 months after the date on which it is granted.
(d) PAYMENT. Any amount payable upon the exercise of a stock
appreciation right may be paid in cash, in shares of Common Stock
having a fair market value which is not more than the amount
payable on the date of exercise, or in a combination of cash and
such shares, or any other consideration in kind, including shares
of restricted stock, as the Committee, in its sole discretion,
shall determine.
(e) RIGHTS NOT TRANSFERABLE. A stock appreciation right shall
not be transferable by the holder except to the extent permitted
by the agreement evidencing such right; provided, that in no
event shall any right be transferable by the holder, other than
by will or the laws of descent and distribution, and such right
shall be exercisable during the holder's lifetime only by the
holder. If, pursuant to the agreement evidencing a stock
appreciation right, the right remains exercisable after the
holder's death, to the extent permitted by such agreement, it may
be exercised by the personal representative of the holder's
estate or by any person who acquired the right to exercise such
right by bequest, inheritance, or otherwise by reason of the
holder's death.
Subject to the foregoing, stock appreciation rights may be made
exercisable in one or more installments, upon the happening of
certain events, upon the fulfillment of certain conditions, or
upon such other terms and conditions as the Committee shall
determine.
SECTION 9. PERFORMANCE AWARDS. Performance Awards made
pursuant to the Plan shall entitle the recipient to receive
future payments of cash or distributions of shares of Common
Stock upon the achievement of pre-established, long-term
performance goals. All performance Awards shall be evidenced by
agreements in such form as the Committee shall from time to time
approve; provided, that each Award shall be subject to the
following requirements:
(a) PERFORMANCE PERIOD. The Committee shall establish with
respect to each performance Award a performance period of not
fewer than one year, nor more than five years.
(b) AMOUNT OF AWARDS. The Committee shall establish a value for
each performance Award, which value may be expressed in terms of
specified dollar amounts or a specified number of shares of
Common Stock. Any such value may be fixed or variable in
accordance with criteria specified by the Committee at the time
of the Award provided that the value of the performance Award
awarded by the Committee to any Participant in a calendar year
shall not exceed $1,000,000.
(c) PERFORMANCE OBJECTIVES. The Committee shall establish
performance objectives to be achieved with respect to each
performance Award during the applicable performance period,
determining the extent to which an employee shall be entitled to
distributions with respect to such performance Award.
(d) PERFORMANCE MEASURES. Performance objectives established by
the Committee may relate to corporate, subsidiary, unit, or
individual performance or any combination thereof, and may be
established in terms of growth in gross or net earnings, earnings
per share, ratio of earnings to equity or assets, share value, or
such other measures or standards as the Committee shall
determine. Multiple objectives may be used which have the same
or different weighting, and such objectives may relate to
absolute performance or to relative performance measured against
other companies or businesses, or against other subsidiaries,
units, or individuals.
(e) ADJUSTMENTS. At any time prior to the end of a performance
period, the Committee may adjust previously established
performance objectives to reflect major unforeseen events such as
changes in applicable laws, regulations, or accounting practices;
mergers, acquisitions, or divestitures; or other unusual or
nonrecurring items of events.
(f) DISTRIBUTIONS WITH RESPECT TO AWARDS. Following the end of
each performance period, the Committee shall determine the extent
to which the performance objectives established for such period
have been achieved and the amounts of cash or number of shares of
Common Stock, if any, that are payable or distributable with
respect to performance Awards made with respect to each period.
Payments with respect to performance Awards may be made in cash
or in shares (based on fair market value at the time of the
distribution), or in any combination thereof, as the Committee
shall determine. Such payments or distributions may be made in a
lump sum or in installments, and shall be subject to such
vesting, deferral or other terms and conditions as the Committee
may determine.
(g) NONTRANSFERABILITY. Performance Awards granted under this
Plan shall not be assignable or otherwise transferable by the
recipient, otherwise than by will or the laws of descent and
distribution, and shall be payable during the recipient's
lifetime, only to the recipient.
SECTION 10. AGREEMENTS. Each Award granted pursuant to the
Plan shall be evidenced by an agreement setting forth the terms
and conditions upon which it is granted. Multiple Awards may be
evidenced by a single agreement. Subject to the limitations set
forth in the Plan, the Committee may, with the consent of the
Participant to whom an Award has been granted, amend any such
agreement to modify the terms or conditions governing the Award
evidenced thereby.
SECTION 11. ADJUSTMENTS. In the event of any change in the
outstanding shares of Common Stock by reason of any stock
dividend or split, recapitalization, reclassification,
combination, or exchange of shares or other similar corporate
change, then if the Committee shall determine, in its sole
discretion, that such change necessarily or equitably requires an
adjustment in the number of shares of Common Stock subject to an
Award, in the option price or value of an Award, or in the
maximum number of shares subject to this Plan, such adjustments
shall be made by the Committee and shall be conclusive and
binding for all purposes of this Plan. No adjustment shall be
made in connection with the issuance by the Company of any
warrants, rights, or options to acquire additional shares of
Common Stock or of securities convertible into shares of Common
Stock.
SECTION 12. TENURE. A Participant's right, if any, to
continue to serve the Company or its subsidiaries as an officer,
employee or otherwise, shall not be enlarged or otherwise
affected by the Participant's designation as a Participant under
the Plan.
SECTION 13. MERGER, CONSOLIDATION,REORGANIZATION, LIQUIDATION, ETC.
Subject to the provisions of the agreement evidencing any Award, if the
Company shall become a party to any corporate merger, consolidation, major
acquisition of property for stock, reorganization, or
liquidation, the Board of Directors of the Company shall have
the power to make any arrangement it deems advisable with
respect to outstanding Awards and in the number of shares of
Common Stock subject to this Plan, which shall be binding for
all purposes of this Plan, including, but not limited to, the
substitution of new Awards for any Awards then outstanding, the
assumption of any such Awards, and the termination of such
Awards. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change in Control:
(i) Any Stock Options and Stock Appreciation
Rights outstanding as of the date such Change in
Control is determined to have occurred and not then
exercisable and vested shall become fully exercisable
and vested to the full extent of the original grant.
(ii) The restrictions applicable to any Restricted
Stock shall lapse, and such Restricted Stock shall
become free of all restrictions and become fully vested
and transferable to the full extent of the original
grant.
(iii) All Performance Awards shall be
considered to be earned and payable in full and any
other deferral or other restriction shall lapse and
such Performance Awards shall be settled in cash as
promptly as practicable.
"Change in Control" shall mean the happening of any of
the following events:
(a) An acquisition by an individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (1) the then
outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (2) the combined
voting power of the then outstanding voting securities
of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (i)
any acquisition directly from the Company, other than
an acquisition by virtue of the exercise of a
conversion privilege unless the security being so
converted was itself acquired directly from the
Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and
(iii) of subsection (b) of this definition; or
(b) The approval by the shareholders of the Company of
a reorganization, merger, consolidation, share exchange
or sale or other disposition of all or substantially
all of the assets of the Company ("Corporate
Transaction") or, if consummation of such Corporate
Transaction is subject, at the time of such approval by
shareholders, to the consent of any government or
governmental agency, the obtaining of such consent
(either explicitly or implicitly by consummation);
excluding, however, such a Corporate Transaction
pursuant to which (i) all or substantially all of the
individuals and entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately
prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock,
and the combined voting power of the then outstanding
voting securities entitled to vote generally in the
election of directors, as the case may be, of the
corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company's assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no
Person (other than the Company, any employee benefit
plan (or related trust) of the Company or such
corporation resulting from such Corporate Transaction)
will beneficially own, directly or indirectly, 20% or
more of, respectively, the outstanding shares of common
stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the
outstanding voting securities of such corporation
entitled to vote generally in the election of directors
except to the extent that such ownership existed prior
to the Corporate Transaction and (iii) individuals who
were members of the board of directors of the
corporation resulting from such Corporate Transaction;
or
(c) The approval by the shareholders of the Company of
a complete liquidation or dissolution of the company.
SECTION 14. EXPENSES OF PLAN. The expenses of administering
this Plan shall be borne by the Company and its subsidiaries.
SECTION 15. RIGHTS AS STOCKHOLDER. Except to the extent
otherwise specifically provided herein or in the agreement
evidencing the Award, no recipient of any Award shall have any
rights as a stockholder with respect to shares of Common Stock
sold or issued pursuant to the Plan until certificates for such
shares have been issued to such person.
SECTION 16. GENERAL RESTRICTIONS. Each Award granted
pursuant to the Plan shall be subject to the requirement that if,
in the opinion of the Committee:
(a) the listing, registration, or qualification of any Common
Stock related thereto upon any securities exchange or any state
or federal law;
(b) the consent or approval of any regulatory body; or
(c) an agreement by the recipient with respect to the
disposition of any such shares of Common stock;
is necessary or desirable as a condition of the issuance or sale
of such shares of Common Stock, such Award shall not be
consummated unless and until such listing, registration,
qualification, consent, approval, or agreement is affected or
obtained in form satisfactory to the Committee.
SECTION 17. WITHHOLDING. If the Company proposes or is
required to distribute shares of Common Stock pursuant to the
Plan, it may require the Participant to remit to it, or withhold
from such Award or from the participant's other compensation, an
amount sufficient to satisfy any applicable federal, state, or
local tax withholding requirements prior to the delivery of any
certificates for such shares of Common Stock.
SECTION 18. AMENDMENTS. The Board of Directors of the
Company may at any time, and from time to time, amend or
terminate the Plan provided, that no amendment:
(a) increasing the number of shares of Common Stock available
for Awards pursuant to the Plan previously established pursuant
to shareholder approval;
(b) changing the classification of employees eligible to
participate in the Plan; or
(c) materially increasing the benefits accruing to Participants
under the Plan;
shall be made without approval by an affirmative vote of
shareholders representing at least the majority of the voting
power at a duly authorized meeting of shareholders if such
affirmative vote is required as a condition of continued
exemption of the Plan under Securities and Exchange Commission
Rule 16b-3.
SECTION 19. SHAREHOLDER APPROVAL. This Agreement shall be
submitted to the shareholders of the Company for its approval by
an affirmative vote of the majority of the voting power at a
meeting of the shareholders before restrictions for any Award
lapse. After initial approval, the Board of Directors shall
determine whether further submission is appropriate or necessary
whenever the Plan is amended, to satisfy Code Section 162(m), the
Rules of the New York Stock Exchange, regulatory or other legal
requirements.
SECTION 20. EFFECTIVE DATE OF THE PLAN. This Plan shall be effective
as of January 1, 1998.