Exhibit 10.5
TECO ENERGY, INC.
1996 EQUITY INCENTIVE PLAN
Nonstatutory Stock Option
TECO Energy, Inc. (the Company ) grants to _______________ (the
Optionee ) a nonstatutory stock option (the Option ) dated
______________ under the Company s 1996 Equity Incentive Plan (the
Plan ). Capitalized terms not otherwise defined herein have the
meanings given to them in the Plan.
1. Grant of Stock Option. Pursuant to the Plan and subject to
the terms and conditions set forth in this Option, the Company hereby
grants to the Optionee the right and option to purchase from the
Company the following number of shares of Common Stock of the Company
at $______________ per share at the earlier of the dates listed below
and the date determined under Section 2.
Number of Shares Date Exercisable
[1/3 of total] [one year from date of grant]
[1/3 of total] [two years from date of grant]
[1/3 of total] [three years from date of
grant]
The Option may be exercised at any time and from time to time
after the first time it may be exercised in accordance with the
foregoing schedule and prior to the expiration of ten years from the
date hereof (the Expiration Date ), except as otherwise provided
herein. The Option may be exercised only with respect to whole
shares.
This Option will not be treated as an incentive stock option
under Section 422 of the Internal Revenue Code of 1986, as amended.
2. Effects of Certain Events. Notwithstanding Section 1, the
Option will become immediately exercisable in full upon the earliest
to occur of the following events:
(a) the Optionee s death;
(b) the termination of Optionee s employment with the
Company or any business entity in which the Company owns directly or
indirectly 50% or more of the total voting power or has a significant
financial interest as determined by the Committee (an Affiliate )
because of a disability that would entitle the Optionee to benefits
under the long-term disability benefits program of the Company for
which the Optionee is eligible, as determined by the Committee;
(c) the termination by the Company or any Affiliate of
Optionee s employment other than for Cause as determined by the
Committee. Cause means (i) willful and continued failure of the
Optionee to substantially perform his duties with the Company or such
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Affiliate (other than by reason of physical or mental illness) after
written demand specifically identifying such failure is given to the
Optionee by the Company, or (ii) willful conduct by the Optionee that
is demonstrably and materially injurious to the Company. For purposes
of this subsection, willful conduct requires an act, or failure to
act, that is not in good faith and that is without reasonable belief
that the action or omission was in the best interest of the Company or
the Affiliate;
(d) the Optionee s retirement from the Company or an
Affiliate at or after attainment of the age at which benefits are
payable under the TECO Energy Group Retirement Plan or any successor
thereto without reduction for commencement of benefits before normal
retirement age, or any earlier date that the Committee determines will
constitute a normal retirement for purposes of this Agreement; or
(e) upon a Change in Control. For purposes of this Option,
a Change in Control means a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e)
of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the Exchange Act ), whether or not
the Company is in fact required to comply therewith; provided, that,
without limitation, such a Change in Control shall be deemed to have
occurred if:
(1) any person (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than the Company, any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or
indirectly by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or
becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly of securities of the Company
representing 30% or more of the combined voting power of the Company s
then outstanding securities;
(2) during any period of 24 consecutive months (not
including any period prior to the date of this Option), individuals
who at the beginning of such period constitute the Board of Directors
of the Company and any new director (other than a director designated
by a person who has entered into an agreement with the Company to
effect a transaction described in subsections (1), (3) or (4) of this
Section 2(e)) whose election by the Board of Directors of the Company
or nomination for election by the shareholders of the Company was
approved by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors at the beginning of such
period or whose election or nomination for election was previously so
approved cease for any reason to constitute a majority thereof;
(3) there is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the Company with
any other corporation, other than (i) a merger or consolidation
resulting in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) at least 65% of the combined voting securities of
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the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no person (as hereinabove defined)
acquires 30% or more of the combined voting power of the Company s
then outstanding securities; or
(4) the shareholders of the Company approve a plan of
complete liquidation of the Company or there is consummated the sale
or disposition by the Company of all or substantially all of the
Company s assets.
3. Exercise and Payment. To exercise this Option, the Optionee
will deliver written notice to the Secretary of the Company specifying
the date of this Option, the number of shares as to which this Option
is being exercised, the price at which the Option on those shares is
exercisable, and a date not later than 30 days after the date of
delivery of the notice when the Optionee will take up and pay for such
shares. On the date specified in such notice, the Company will issue
to the Optionee the number of shares purchased against payment
therefor in cash, including by check, or in such other form as the
Committee may approve.
4. Termination of Employment. If the Optionee s employment
with the Company or an Affiliate terminates for any reason (a
Termination of Employment ) coincident with or after the first time
this Option may be exercised, the Option will remain exercisable, with
respect to the shares with respect to which the Option was exercisable
as of the date of Termination of Employment, for the longest
applicable period provided below. This Option will terminate, and no
rights will be exercisable hereunder, after the expiration of the
applicable exercise period.
(a) The Optionee may exercise the rights available under
this Option at the time of Termination of Employment for a period of
three months thereafter, but in no event after the Expiration Date.
(b) I f Termination of Employment occurs because of
disability, the Optionee or the Optionee s guardian or legal
representative may exercise the rights available under this Option at
the time of Termination of Employment at any time on or before the
later of (i) twelve months after the Termination of Employment or
(ii) the Expiration Date. The Committee will determine whether and
when Termination of Employment because of disability has occurred for
purposes of this Section 4(b).
(c) If Termination of Employment occurs for any reason on
or after the age at which benefits are payable to the Optionee without
reduction for commencement of such benefits before normal retirement
age under the TECO Energy Group Retirement Plan (or any successor
thereto), or any earlier age that the Committee determines will
constitute a normal retirement for purposes of this Option, the
Optionee (or the Optionee s guardian or legal representative or, after
death, the Optionee s Designated Beneficiary under the Plan or, if
none has been designated, those entitled to do so by the Optionee s
will or the laws of descent and distribution) may exercise the rights
available under this Option at the time of Termination of Employment
at any time on or before the Expiration Date.
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(d) Upon the death of the Optionee, the Optionee's
Designated Beneficiary under the Plan or, if none has been designated,
those entitled to do so by the Optionee s will or the laws of descent
and distribution, may exercise the rights available under this Option
at the time of death for a period of twelve months thereafter or, if
Termination of Employment occurs because of death, at any time on or
before the later of (i) twelve months after the date of death or
(ii) the Expiration Date.
The Committee will determine whether an authorized leave of
absence constitutes Termination of Employment for purposes of this
Option.
5. Adjustment of Terms. In the event of corporate transactions
affecting the Company s outstanding Common Stock, the Committee will
equitably adjust the number and kind of shares subject to this Option
and the respective exercise prices hereunder to the extent provided by
the Plan.
6. No Transfer. This Option will not be transferable other
than by will or the laws of descent and distribution and will be
exercisable during the Optionee s lifetime only by the Optionee or the
Optionee s guardian or legal representative.
7. Securities Laws. The purchase of any shares by the Optionee
upon exercise of this Option will be subject to the conditions that
(i) the Company may in its discretion require that a registration
statement under the Securities Act of 1933 with respect to the sale of
such shares to the Optionee will be in effect, and such shares will be
duly listed, subject to notice of issuance, on any securities exchange
on which the Common Stock may then be listed, (ii) all such other
action as the Company considers necessary to comply with any law, rule
or regulation applicable to the sale of such shares to the Optionee
will have been taken and (iii) the Optionee will have made such
representations and agreements as the Company may require to comply
with applicable law.
8. Withholding Taxes. The Optionee will pay to the Company, or
make provision satisfactory to the Committee for payment of, any taxes
required by law to be withheld in respect of the exercise of the
Option no later than the date of the event creating the tax liability.
In the Committee s discretion, such tax obligations may be paid in
whole or in part in shares of Common Stock, including shares retained
from the exercise of this Option, valued at fair market value on the
date of delivery. The Company and its Affiliates may, to the extent
permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to the Optionee.
9. The Committee. Any determination by the Committee under, or
interpretation of the terms of, this Option or the Plan will be final
and binding on the Optionee.
10. Limitation of Rights. The Optionee will have no rights as a
shareholder with respect to any shares subject to this Option until
such shares are issued against payment therefor. The Optionee will
have no right to continued employment by virtue of this Option.
11. Amendment. The Company may amend, modify or terminate this
Option, including substituting another Award of the same or a
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different type and changing the date of realization, provided that the
Optionee s consent to such action will be required unless the action,
taking into account any related action, would not adversely affect the
Optionee.
12. Governing Law. This Option will be governed by and
interpreted in accordance with the laws of Florida.
TECO ENERGY, INC.
By:
D. E. Schwartz
Secretary
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