EXHIBIT 10.(a)
PHANTOM STOCK PLAN
FOR THE BENEFIT OF
NON-EMPLOYEE DIRECTORS OF
FLORIDA PROGRESS CORPORATION
Effective as of January 1, 1999
PHANTOM STOCK PLAN
FOR THE BENEFIT OF
NON-EMPLOYEE DIRECTORS OF
FLORIDA PROGRESS CORPORATION
Table of Contents
Page
ARTICLE I Definitions............................................1
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ARTICLE II Administration.........................................3
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ARTICLE III Participation..........................................4
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ARTICLE IV Phantom Stock Unit Awards and Accounts.................5
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ARTICLE V Financing..............................................8
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ARTICLE VI Payment for Phantom Stock Units........................8
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ARTICLE VII Confidentiality and Restrictions on Competition........9
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ARTICLE VIII Amendment and Termination.............................10
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ARTICLE IX Miscellaneous.........................................11
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PHANTOM STOCK PLAN
FOR THE BENEFIT OF
NON-EMPLOYEE DIRECTORS OF
FLORIDA PROGRESS CORPORATION
PURPOSE
Florida Progress Corporation (the "Company") hereby establishes the
Phantom Stock Plan for the Benefit of Non-Employee Directors of Florida Progress
Corporation (the "Plan"), effective as of January 1, 1999, as part of the
Company's compensation program in order to attract, retain and motivate
qualified members of its Board of Directors. The Plan is intended to provide
non-employee members of the Board of Directors who contribute their services to
the Company with the opportunity to share in the continued success of the
Company.
ARTICLE I
Definitions
(a) "Account" shall mean a Participant's Phantom Stock Unit Account as
described in Article IV.
(b) "Board" or "Board of Directors" shall mean the board of directors of the
Company.
(c) "Change in Control" shall mean and be deemed to have occurred if:
(1) Any person is or becomes the "Beneficial Owner" (as that term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the
"Exchange Act")), directly or indirectly, of securities of the Company
(not including in the securities beneficially owned by such person any
securities acquired directly from the Company) representing twenty-five
percent (25%) or more of the combined voting power of the Company's
then outstanding securities; or
(2) During any period of twenty-four (24) consecutive months, individuals
who at the beginning of such period constitute the Board 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
clause (1), (3) or (4) of this definition or any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents) whose election by the
Board or nomination for election by the Company's stockholders 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 of the Board;
or
(3) The closing of a reorganization, merger or consolidation, other than a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were Beneficial
Owners, immediately prior to such reorganization, merger or
consolidation, of the combined voting power of the Company's then
outstanding securities beneficially own, directly or indirectly,
immediately after such reorganization, merger or consolidation, more
than seventy-five percent (75%) of the combined voting power of the
securities of the Company resulting from such reorganization, merger or
consolidation in substantially the same proportions as their respective
ownership, immediately prior to such reorganization, merger or
consolidation, of the combined voting power of the Company's
securities; or
(4) (A) The closing of the sale or disposition by the Company (other
than to a subsidiary of the Company) of all or substantially all of
the assets of the Company (or any such sale or disposition is
effected through condemnation proceedings), or
(B) the adoption by the Company of a plan of liquidation or
dissolution of the Company.
Notwithstanding the foregoing, a Change in Control shall not include any event,
circumstance or transaction which results from the action (excluding the
Participant's service as a member of the Board of Directors) of any person or
group of persons which includes, is directly affiliated with or is wholly or
partly controlled by one (1) or more executive officers of the Company or its
subsidiaries and in which the Plan Participant actively participates.
(d) "Company" shall mean Florida Progress Corporation and its
successors.
(e) "Effective Date" of the Plan shall mean January 1, 1999.
(f) "Non-Employee Director" shall mean any member of the Board of
Directors who is not an employee of the Company.
(g) "Participant" shall mean any Non-Employee Director who is
covered by this Plan as provided in Article III. When required by the
context of the Plan, the term Participant shall include any former
Participant in the Plan.
(h) "Phantom Stock Unit" shall mean a right to receive, without
payment to the Company, an amount equal to the fair market value of a share
of common stock of the Company determined as of the close of the last
business day coincident with or immediately preceding the date of the
Participant's termination of service as a member of the Board of Directors.
(i) "Plan" shall mean the Phantom Stock Plan for the Benefit of
Non-Employee Directors of Florida Progress Corporation hereby created and
as it may be amended from time to time.
(j) "Plan Administrator" shall mean the Company.
(k) "Plan Year" shall mean 12-month period ending on each March 31.
(l) "Year of Service" shall mean each Plan Year in which a
Non-Employee Director serves as a member of the Board of Directors of the
Company on the last day of the Plan Year. The term "Year of Service" shall
include Plan Years beginning before the Effective Date of the Plan.
ARTICLE II
Administration
(a) Plan Administrator.
(1) The Plan Administrator shall have complete control and discretion
to manage the operation and administration of the Plan, with all powers
necessary to enable it to carry out its duties in that respect. Not in
limitation, but in amplification of the foregoing, the Plan Administrator shall
have the following powers:
(A) To determine all questions relating to the eligibility
of Non-Employee Directors to continue to participate;
(B) To maintain all records and books of account necessary
for the administration of the Plan;
(C) To interpret the provisions of the Plan and to make and to
publish such interpretive or procedural rules as are not inconsistent
with the Plan and applicable law;
(D) To compute, certify and arrange for the payment of benefits
to which any Participant or beneficiary is entitled;
(E) To process claims for benefits under the Plan by
Participants or beneficiaries;
(F) To engage consultants and professionals to assist the Plan
Administrator in carrying out its duties under this Plan; and
(G) To develop and maintain such instruments as may be deemed
necessary from time to time by the Plan Administrator to facilitate
payment of benefits under the Plan.
(2) The Plan Administrator may designate employees of the Company to
assist the Plan Administrator in the administration of the Plan and
perform the duties required of the Plan Administrator hereunder.
(b) Plan Administrator's Authority. The Plan Administrator may consult
with Company officers, legal and financial advisers to the Company and others,
but nevertheless the Plan Administrator shall have the full authority and
discretion to act, and the Plan Administrator's actions shall be final and
conclusive on all parties.
(c) Liability; Indemnification. Notwithstanding any other provision of
this Plan, no member of the Board, nor any staff member of the Company acting on
behalf of the Company, shall be liable to any Participant, beneficiary, or other
person for any action taken or omitted in connection with the interpretation and
administration of this Plan. The Plan Administrator and its employees shall be
entitled to rely conclusively on all tables, valuations, certificates, opinions
and reports that shall be furnished by any actuary, accountant, insurance
company, consultant, counsel or other expert who shall be employed or engaged by
the Plan Administrator in good faith. The Company shall indemnify the members of
the Board, and any such staff member, against any and all claims, losses,
damages and expenses, including counsel fees, reasonably incurred by them, and
any liability, including any amounts paid in settlement with their approval,
arising from their action or failure to act in connection with the
interpretation and administration of this Plan. The provisions of this paragraph
are not intended to be exclusive, and nothing contained in this paragraph shall
in any way limit indemnification provided members of the Board, and any such
staff member, under the by-laws of the Company, by contract, by statute or
otherwise.
ARTICLE III
Participation
Each Non-Employee Director of the Company on the Effective Date of this
Plan shall become a Participant as of such date. Thereafter, any individual who
subsequently becomes a Non-Employee Director of the Company shall become a
Participant in the Plan as of the date he or she is elected to the Board of
Directors (or, if later, as of the first day of the first Plan Year in which he
or she serves as a Non-Employee Director).
ARTICLE IV
Phantom Stock Unit Awards and Accounts
(a) In General. Except as provided in paragraph (b) of this Article IV,
awards of Phantom Stock Units under this Plan shall be automatic and
non-discretionary, and subject to the terms and conditions provided in Articles
IV, V, VI and VII.
(b) Initial Awards. Each Participant who is a member of the Board of
Directors on the Effective Date shall be awarded 2,000 Phantom Stock Units as of
such date. Each Non-Employee Director who first participates in the Plan after
the Effective Date shall be awarded Phantom Stock Units in an amount to be
determined by the Board upon his or her initial commencement of participation in
the Plan.
(c) Recurring Awards. Each Participant who is reelected to the Board of
Directors at any time after the Effective Date shall be awarded 600 Phantom
Stock Units upon his or her reelection to a new term as a member of the Board of
Directors. In addition, each Participant who is a Participant in the Plan as of
the Effective Date and whose term is scheduled to expire in April, 2000 shall be
awarded 200 Phantom Stock Units as of April 1, 1999. Each Participant who is a
Participant in the Plan as of the Effective Date and whose term is scheduled to
expire in April, 2001 shall be awarded 400 Phantom Stock Units as of April 1,
1999.
(d) Dividend Equivalent Awards. The Company shall award additional Phantom
Stock Units to Participants as of the last day of each Plan Year based upon the
following formula: Whenever cash dividends are paid to stockholders with respect
to the common stock of the Company, each Participant shall be awarded additional
Phantom Stock Units pursuant to this paragraph (d). Each such award shall be
equal to the number of shares of common stock of the Company that would be
purchased with cash dividends for the Participant (1) if the Participant was
participating in the Florida Progress Corporation Progress Plus Stock Plan and
(2) if, prior to the cash dividend payment, the Participant was credited with a
number of shares of common stock of the Company under the Florida Progress
Corporation Progress Plus Stock Plan that was equal to the number of Phantom
Stock Units actually credited to the Participant under the terms of this Plan.
(e) Changes in Common Stock. In the event that the Plan Administrator
determines that any recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, exchange of shares, stock dividend, warrants,
or rights offering to purchase common stock at a price below Fair Market Value,
or other similar transaction affects the Company's common stock such that an
adjustment is required in order to preserve the benefits or potential benefits
intended to be made available under the Plan, then the Plan Administrator shall
equitably adjust any or all of the number of Phantom Stock Units credited to
Participants' Accounts.
(f) Participants' Accounts.
(1) Each Phantom Stock Unit award made pursuant to this Plan shall be
recorded by the Plan Administrator in a Phantom Stock Unit Account
maintained in the name of the Participant.
(2) Phantom Stock Units awarded to the Participant shall be credited
to his or her Account as of the Effective Date of the award and such
Account shall be charged from time to time with all amounts that are paid
to, or forfeited with respect to, the Participant.
(3) All amounts that are credited to a Participant's Account shall be
credited solely for purposes of accounting and computation. A Participant
shall not have any interest in or right to such Account at any time.
(g) Vested Interests. The vested Phantom Stock Units credited to a
Participant's Account shall be payable to the Participant at the time, and in
the form and manner, provided in Article VI.
(1) Phantom Stock Units awarded to a Participant pursuant to paragraph
(b) of this Article IV shall vest according to the following schedule,
based upon Years of Service credited to a Non-Employee Director from his or
her initial date of service as a member of the Board of Directors:
Years of Service Vested Percentage
1 Year of Service 16.66%
2 Years of Service 33.33%
3 Years of Service 50.00%
4 Years of Service 66.67%
5 Years of Service 83.33%
6 Years of Service 100%
(2) Phantom Stock Units awarded to a Participant pursuant to paragraph
(c) of this Article IV shall vest according to the following schedule,
based upon Years of Service credited to a Participant after the reelection
with respect to which the Phantom Stock Units are awarded:
Years of Service Vested Percentage
1 Year of Service 33.33%
2 Years of Service 66.67%
3 Years of Service 100%
Each recurring award credited to a participant pursuant to paragraph
(c) of Article IV shall be subject to a separate three year vesting
schedule. Notwithstanding the foregoing provisions of this subparagraph
(2),
(A) each 200 Phantom Stock Unit award made as of April 1, 1999,
to a Participant who is a Participant in the Plan as of the Effective
Date and whose term is scheduled to expire in April, 2000 shall be
non-vested prior to March 31, 2000 and shall become 100% vested as of
March 31, 2000 if the Participant is credited with an additional Year
of Service as of such date; and
(B) each 400 Phantom Stock Unit award made as of April 1, 1999,
to a Participant who is a Participant in the Plan as of the Effective
Date and whose term is scheduled to expire in April, 2001 shall be
non-vested prior to March 31, 2000 and shall become 50% vested as of
March 31, 2000 if the Participant is credited with an additional Year
of Service as of such date, and shall be 100% vested as of March 31,
2001 if the Participant is credited with an additional Year of Service
as of such date.
(3) Phantom Stock Units awarded to a Participant pursuant to
paragraph (d) of this Article IV shall be treated as vested to the
extent such units are attributable to vested Phantom Stock Units
credited to the Participant's Account.
(4) Notwithstanding the provisions of subparagraphs (1), (2), and
(3) above, all Phantom Stock Units awarded to a Participant shall
become fully vested in the event of a Change in Control.
(5) If a Participant is less than 100% vested in all of the
Phantom Stock Units credited to his or her Account at the time he or
she first receives a benefit payment pursuant to Article VI, his or
her non-vested Phantom Stock Units will be forfeited.
(h) Valuation; Annual Statement. The value of a Participant's Account shall
be determined by the Plan Administrator and the Plan Administrator may establish
such accounting procedures as are necessary to account for the Participant's
interest in the Plan. Each Participant's Account shall be valued as of the last
day of each Plan Year or more frequently as determined by the Plan
Administrator. The Plan Administrator shall furnish each Participant with an
annual statement of his or her Account.
ARTICLE V
Financing
(a) Financing. The benefits under this Plan shall be paid out of the
general assets of the Company which shall remain subject to the claims of the
Company's creditors until such amounts are paid to the Participants.
(b) No Trust Created. Nothing contained in this Plan, and no action taken
pursuant to the provisions of this Plan, shall create or be construed to create
a funded plan, a trust of any kind or a fiduciary relationship between the
Company and the Participant, his or her Beneficiary or any other person.
(c) Unsecured Interest. The Participant shall not have any interest
whatsoever in any specific asset of the Company. To the extent that any person
acquires a right to receive payments under this Plan, such right shall be no
greater than the right of any unsecured general creditor of the Company.
ARTICLE VI
Payment for Phantom Stock Units
(a) Timing of Payment. Subject to the restrictions of Article VII, the
payment of a Participant's vested interest in the amount credited to his or her
Account shall commence as soon as practicable following (1) his or her
termination of service with the Board of Directors, (2) his or her death, or (3)
a Change in
Control.
(b) Form and Manner of Benefit Payment.
(1) In the case of a Participant who terminates his or her service
with the Board of Directors by reason of his or her death, or in the case
of a Change in Control, the Participant's benefit shall be paid in a lump
sum cash payment.
(2) In the case of a Participant who terminates his or her service
with the Board of Directors for any other reason, the Participant's benefit
shall be paid as a series of annual cash installments (not in excess of 10)
or as a lump sum cash payment, as selected by the Participant. A
Participant shall elect the manner of payment for his or her benefit upon
commencing participation in the Plan. Prior to the commencement of benefit
payments under the Plan, the Participant may, subject to the approval of
the Plan Administrator, revise the manner of payment. Any request by a
Participant to revise the manner of payment must be received by the Plan
Administrator not later than December 31 of the calendar year preceding the
year in which benefit payments commence.
(3) If a Participant dies before he or she has received all of his or
her vested benefits under the Plan, all unpaid amounts shall be paid in a
lump sum as soon as administratively practicable after the death of the
Participant to the beneficiary or beneficiaries designated by the
Participant to receive such benefits. A designation of beneficiaries may be
made in the Participant's will or on a separate form prescribed by and
filed with the Plan Administrator, which form shall comply with the laws of
the state of the Participant's residence. Any separate form filed with the
Plan Administrator may be changed at any time by filing a new form with the
Plan Administrator. If the Participant has designated no beneficiary, or if
no beneficiary that he or she has designated survives him or her, then such
unpaid amounts shall be paid to his or her estate. In the event of any
dispute as to the entitlement of any beneficiary, the Plan Administrator
may withhold any payment until such dispute has been resolved.
(c) Tax Withholding. The Company may withhold, or require the withholding
from any benefit payment which it is required to make, any federal, state or
local taxes required by law to be withheld with respect to a benefit payment and
such sum as the Company may reasonably estimate as necessary to cover any taxes
for which the Company may be liable and which may be assessed with regard to
such payment. Upon discharge or settlement of such tax liability, the Company
shall pay the balance of such sum, if any, to the Participant, or if the
Participant is then deceased, to the beneficiary of the Participant. Prior to
making any payment hereunder, the Company may require such documents from any
taxing authority, or may require such indemnities or surety bond, as the Company
shall reasonably deem necessary for its protection.
ARTICLE VII
Confidentiality and Restrictions on Competition
(a) Confidentiality. As a condition of receiving benefits under this Plan,
a Participant shall not, after the termination of his or her service as a member
of the Board of Directors, voluntarily appear against the Company or any
affiliate of the Company before any judicial or administrative tribunal or
legislative body, on any matter about which the Participant possesses any
expertise or special knowledge relative to the Company's or such affiliate's
business. Any breach of this condition will result in a complete forfeiture of
any further benefits under the Plan for both the Participant and any surviving
beneficiary of the Participant. The Company may require the Participant to
execute a separate confidentiality agreement prior to the Participant's receipt
of benefits, which agreement may provide for liquidated damages, in the event of
a breach by the Participant, in an amount equal to the benefits paid under this
Plan.
(b) Restrictions on Competition. As a condition of receiving benefits under
this Plan, a Participant shall not directly or indirectly engage in competition
with the
Company or any affiliate of the Company at any time prior to or during the one
year period following his or her initial entitlement to benefits payable under
this Plan. Any breach of this condition will result in a complete forfeiture of
any further benefits under the Plan for both the Participant and any surviving
beneficiary of the Participant. The Company may require the Participant to
execute a separate agreement establishing restrictions on competition prior to
the Participant's receipt of benefits, which agreement may provide for
liquidated damages, in the event of a breach by the Participant, in an amount
equal to the benefits paid under this Plan. For purposes of this paragraph (b),
a Participant shall be deemed to "engage in competition" with the Company (or an
affiliate of the Company) if he or she
(1) discloses proprietary information with respect to the Company (or
any affiliate of the Company) to any person, corporation, or other entity
for any purpose whatsoever;
(2) owns, manages, operates, controls, is employed by, acts as an
agent for, consults with, advises, participates in or is connected in any
manner with the ownership, management, operation or control of any business
(in any state of the United States in which the Company or any affiliate of
the Company is doing business) which is engaged in businesses that are or
may be competitive to the businesses of the Company or any affiliate of the
Company; or
(3) solicits any of the employees or agents of the Company (or any
affiliate of the Company) to terminate their employment or relationship
with the Company (or any affiliate of the Company).
(c) Essential Elements. The provisions of this Article VII are essential
elements of this Plan, and, but for the confidentiality requirements in
paragraph (a) and the restrictions on competition in paragraph (b) applicable to
the Participants, the Company would not agree to sponsor this Plan for the
benefit of the Participants.
ARTICLE VIII
Amendment and Termination
(a) Amendment and Termination. The Plan may be amended or terminated at any
time by the Board of Directors. Notice of any such amendment or termination
shall be given in writing to each Participant having an interest in the Plan.
(b) Effect of Amendment or Termination.
(1) No amendment or termination of the Plan shall adversely affect the
rights of any Participant with respect to any vested benefit credited to
the Account of the Participant prior to such amendment or termination.
(2) Upon termination of the Plan, each Participant (or his or her
beneficiaries) shall be paid the balance of his or her Account in a lump
sum cash payment.
ARTICLE IX
Miscellaneous
(a) Payments to Minors and Incompetents. If the Plan Administrator receives
satisfactory evidence that a person who is entitled to receive any benefit under
the Plan, at the time such benefit becomes available, is a minor or is
physically unable or mentally incompetent to receive such benefit and to give a
valid release therefor, and that another person or an institution is then
maintaining or has custody of such person, and that no guardian or other
representative of the estate of such person shall have been duly appointed, the
Plan Administrator may authorize payment of such benefit otherwise payable to
such person to such other person or institution; and the release of such other
person or institution shall be a valid and complete discharge for the payment of
such benefit.
(b) No Interest in Assets. Nothing contained in the Plan shall be deemed to
give any Participant any equity or other interest in the assets, business or
affairs of the Company. No Participant in the Plan shall have a security
interest in assets of the Company used to pay benefits.
(c) Recordkeeping. Appropriate records shall be maintained for the purpose
of the Plan by the officers and employees of the Company at the Company's
expense and subject to the supervision and control of the Plan Administrator.
(d) Non-Alienation of Benefits. No benefit under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt to do so shall be void. No benefit under
the Plan shall in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of any person. If any person entitled to
benefits under the Plan shall become bankrupt or shall attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any benefit under
the Plan, or if any attempt shall be made to subject any such benefit to the
debts, contracts, liabilities, engagements or torts of the person entitled to
any such benefit, except as specifically provided in the Plan, then such
benefits shall cease and terminate at the discretion of the Plan Administrator.
The Plan Administrator may then hold or apply the same or any part thereof to or
for the benefit of such person or any dependent or beneficiary of such person in
such manner and proportions as it shall deem proper.
(e) State Law. This Plan shall be construed in accordance with the laws of
Florida.
(f) Number. Except when otherwise indicated by the context, the definition
of any term herein in the singular shall include the plural.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
its duly authorized officers on this 18th day of February, 1999.
ATTEST: FLORIDA PROGRESS CORPORATION
(CORPORATE SEAL)
/s/ Kathleen M. Haley /s/ Richard Korpan
_____________________________ By: _________________________
Secretary
Its: President, Chief Executive Officer
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