RESTRICTED STOCK AGREEMENT
THIS AGREEMENT made as of the 21st day of December, 1994, by and
between Heartland Development Corporation, a Wisconsin corporation (the
"Company"), Erroll B. Davis, Jr. (the "Shareholder"), and the spouse of
the Shareholder, and WPL Holdings, Inc., a Wisconsin corporation
("Holdings").
WITNESSETH:
WHEREAS, the Shareholder serves as President of Holdings with
supervisory responsibility for the Company and serves as Chairman of the
Company;
WHEREAS, to promote continuity of management and retain the
services of the Shareholder and enhance the interest of the Shareholder in
the success of the Company, Holdings believes it is in its and its
shareholders' best interests to grant an equity interest in the Company to
the Shareholder and to provide the Shareholder with rights to exchange
shares of the Company for shares of Common Stock, $.01 par value
("Holdings Common Stock") of Holdings, which exchange is intended by
Holdings and the Shareholder to qualify as a reorganization under the
Internal Revenue Code Section 368(a)(1)(B);
WHEREAS, Holdings, the Company and the Shareholder believe it to
be in the best interests of the parties hereto to assure the continuity of
ownership of the shares of Common Stock, no par value per share, of the
Company ("Stock") to be granted to the Shareholder pursuant to this
Agreement by providing for, among other things, certain restrictions on
the transfer of such Stock;
WHEREAS, the Wisconsin Marital Property Law, Wisconsin Statutes
Chapter 766, effective January 1, 1986, may have the effect of vesting in
the Shareholder's spouse (the "Spouse") an interest in the Stock to be
owned by the Shareholder, which interest may take the form of an interest
in marital property or deferred marital property under such law; and
WHEREAS, the Shareholder desires to provide for the disposition
of any interest that the Shareholder's Spouse may obtain in the
Shareholder's Stock by reason of the Wisconsin Marital Property Law.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto mutually agree and
covenant as follows:
1. Definitions. For purposes of this Agreement, the following
terms have the meanings set forth below:
"Cause" means any one or more of the following: (i) theft,
dishonesty, fraudulent misconduct, gross dereliction of duty or other
grave misconduct on the part of the Shareholder which is substantially
injurious to Holdings or the Company or (ii) repeated and demonstrated
failure to perform material duties in a competent and efficient manner.
"Disability" means the Shareholder becomes physically or
mentally disabled so as to become unable, for a period of more than six
(6) consecutive months, to perform his duties hereunder on substantially a
full-time basis.
"Divorce" is defined in Section 9(A).
"Net Book Value Per Share" means the value of the Company's
consolidated tangible assets minus all of its consolidated liabilities as
reflected on the Company's financial statements for the year end
immediately preceding the date in question, divided by the number of
shares of Stock outstanding as of the date of such financial statements,
plus any additional shares of Stock that have vested in the Shareholder
pursuant to this Agreement subsequent to the date of such financial
statements (with such share numbers appropriately adjusted for any stock
splits); provided, however, that no value shall be given to goodwill,
going concern value, trademarks, copyrights, licenses, trade names,
patents or other intangible assets of the Company. Net Book Value Per
Share shall be determined in accordance with generally accepted accounting
principles consistently applied. If the Company has obtained audited
financial statements for such fiscal year, such audited financial
statements shall be conclusively used in such calculation.
"Pledge" is defined in Section 6(A).
"Public Offering" means an underwritten offering to the public,
or distribution to the shareholders of Holdings, of equity securities
which results in at least 20% of the total value of the Company's equity
securities being held by 500 or more shareholders other than Holdings.
"Purchaser." The Company shall at all times have the right (but
not the obligation) to arrange for the purchase by one or more Purchasers
in the Company's stead of all or part of any Stock that the Company has
the right or obligation to purchase pursuant to any Section of this
Agreement. The term "Purchaser" shall mean an individual or entity
designated by the Company to purchase Stock in lieu of the Company, as
provided by the preceding sentence, in such amounts and on such terms and
conditions as the Company shall determine. Such designation of a Purchaser
or Purchasers and such determination of amounts, terms and conditions
shall be made by the Company's Board of Directors. Each Purchaser shall
pay its pro rata share of the aggregate purchase price as set forth in the
appropriate Section of this Agreement for any Stock purchased by such
Purchaser.
"Sale Notice" is defined in Section 10(A).
"Sale of the Company" means (i) the transfer for value of more
than 50% of the shares of Stock owned by the existing shareholders in the
aggregate, or of voting trust certificates representing such shares, to a
purchaser or purchasers, other than one or more of the existing
shareholders, in a transaction or series of transactions in any one (1)
year period; or (ii) the merger or consolidation of the Company so that
upon completion of such transaction the existing shareholders own less
than 50% of the outstanding Stock of the successor; or (iii) the sale of
substantially all of the Company's assets to one or more third parties for
value in one transaction or a series of related transactions. "Sale of the
Company" shall not include a Public Offering, a pledge of Stock by the
Company's majority shareholder or a transfer of such Stock by the
Company's majority shareholder to its primary lenders.
"Transfer" is defined in Section 4(A).
"Transferee" is defined in Section 9(D).
"Transfer Notice" is defined in Section 5(A).
"Valuation Formula Price" means a price as of the most recent
Fiscal Year as determined by an independent appraiser selected by the
Compensation Committee of the Board of Directors of Holdings and the
Shareholder, provided however, if Holdings and the Shareholder cannot
agree on an appraiser each of Holdings and the Shareholder shall select an
appraiser and each of such appraisers so selected shall select a third
appraiser. The Valuation Formula Price shall be the average of the fair
market values determined by such three appraisers.
2. Grant of Stock. In consideration of the continued
employment of the Shareholder by Holdings and the Company, the Company
grants to the Shareholder 1.67 shares of Stock upon the terms and
conditions set forth herein.
3. Vesting. As long as the Shareholder is still serving the
Company as its Chairman, the Stock granted to the Shareholder pursuant to
Section 2 hereof shall vest in the Shareholder as follows: (i) .4175
shares of Stock on December 21, 1994; (ii) .4175 shares of Stock on March
31, 1995; (iii) .4175 shares of Stock on March 31, 1996; and (iv) .4175
shares of Stock on March 31, 1997. Notwithstanding the vesting schedule
above, (A) all shares of Stock granted to the Shareholder pursuant to
Section 2 hereof shall vest in the Shareholder if there is a Sale of or
public offering by the Company and (B) in the event of the Executive's
death or Disability prior to March 31, 1997, a pro rata portion (based on
the number of days elapsed from the immediately preceding March 31 to the
date of death or Disability) of the Stock that would have vested on the
next succeeding March 31 shall vest as of the date of death or Disability.
4. Restrictions on Transferability.
(A) Except as hereinafter provided, the Shareholder may not
sell, pledge, encumber, transfer by or pursuant to a gift or bequest or
otherwise transfer or dispose of, and will not permit to be sold,
encumbered, attached, or otherwise disposed of or transferred in any
manner, either voluntarily or by operation of law (collectively referred
to as "Transfer"), all or any portion of the Stock granted to the
Shareholder pursuant to this Agreement, or any Stock at any time hereafter
acquired by the Shareholder in respect of such Stock, except in accordance
with and subject to the terms of this Agreement.
(B) For purposes of this Agreement, all references to Stock
owned or held by the Shareholder shall include, without limitation, all
interests in Stock now owned or hereafter acquired by the Spouse as
marital property or pursuant to the Spouse's elective rights to deferred
marital property or to an augmented marital property estate. The creation
of an interest in the Stock in the Spouse by operation of marital property
laws during the Shareholder's lifetime shall not be deemed to be a
Transfer of such Stock or any portion thereof for purposes of this
Agreement so long as (i) the Stock in which such interest is created
continues to be registered solely in the name of the Shareholder and (ii)
the Shareholder maintains full management and control rights with respect
to such Stock; provided, however, that if either of the foregoing
conditions shall cease to be satisfied, then the Shareholder and the
Company shall have the option to purchase the Spouse's interest in the
Stock in the sequence and manner and upon the same terms and conditions as
specified in Section 9 hereof as if the marital relationship of the
Shareholder and the Spouse had been terminated. During the marriage of
the Shareholder and the Spouse, the Shareholder's obligation to sell or to
offer to sell Stock and the Company's option or right to purchase the
Stock hereunder shall include an obligation on the part of the Spouse to
sell or to offer to sell any interest of the Spouse in the Stock in the
same manner and upon the same terms and conditions.
(C) Anything in this Agreement to the contrary notwithstanding,
the Shareholder may not Transfer any shares of Stock granted pursuant to
Section 2 hereof until such shares are vested pursuant to Section 3
hereof.
5. Right of First Refusal.
(A) If the Shareholder desires to Transfer any Stock (other
than pursuant to Sections 6 or 7 or to the Company), then the Shareholder
shall give prior written notice ("Transfer Notice") of such intention to
the Company specifying the name of the proposed transferee, the proposed
consideration for such transfer, the number of shares involved and all
other terms of the proposed transfer. Such Transfer Notice shall
constitute an offer to sell to the Company the number of shares of Stock
indicated in the Transfer Notice at a price per share equal to the lesser
of the price specified in the Transfer Notice per share or the Net Book
Value Per Share (or if after March 31, 1997, the Valuation Formula Price)
as of the date of the Transfer Notice. Within thirty (30) days after
receipt of such Transfer Notice, the Company may, at its option, elect to
purchase all, but not less than all, of the shares of Stock offered. The
Company shall exercise its option to purchase by delivering written notice
thereof to the Shareholder within the option period.
(B) If the Company elects to purchase the Shareholder's Stock
as provided in Section 5(A), then the terms of payment for such purchase
shall be the terms offered by the Shareholder's proposed transferee as
specified in the Transfer Notice; provided, however, if the shares of
Stock are offered for purchase because of a Transfer by operation of law,
the terms of such purchase shall be cash at the closing. The closing of
any sale made pursuant to Section 5(A) hereof shall be held not later than
sixty (60) days after receipt of the Transfer Notice by the Company or on
such other date as mutually agreed by the Company and the Shareholder.
(C) If the Company is entitled to purchase the Shareholder's
Stock as provided herein but does not elect to do so, then the Shareholder
may make a bona fide transfer of the Stock described in the Transfer
Notice to the prospective purchaser named in the Transfer Notice. Such
transfer shall be made only in strict accordance with the specific terms
stated in the Transfer Notice and only if such purchaser agrees in writing
to sign a counterpart of this Agreement so as to impose on the Stock so
transferred restrictions on further transferability identical to the
restrictions imposed by this Agreement, and to bind the transferee as if
such transferee were a party hereto. If, however, the Shareholder fails
to make such transfer in compliance with this Section 5(B) within thirty
(30) days following the expiration of the last time period provided in
Section 5(A) above, the Shareholder's Stock shall again become subject to
all the restrictions of this Agreement.
6. Pledge. If the Shareholder desires to voluntarily Transfer
by pledge, security interest or other encumbrance ("Pledge") any of the
Shareholder's Stock (other than to the Company), then the Shareholder
shall first give notice thereof to the Company, setting forth the terms of
Pledge and affording to the Company a period of not less than ten (10)
days within which to consult and advise with the Shareholder and attempt
to arrange an acceptable alternative to such Pledge, if desirable and
feasible. Such notice period may be waived or shortened by written notice
from the Company to the Shareholder. Any attempted Pledge in violation of
this Agreement shall be void. If no mutually acceptable alternative is
arranged within such period, then the Shareholder shall be free to effect
such Pledge, provided that the Shareholder shall continue to be subject to
all of the terms and provisions of this Agreement in respect to the
Shareholder's interest in the Pledged Stock, and the holding by the
pledgee shall likewise be subject to all such terms and provisions as
though the pledgee were a party hereto. So long as such Pledge is in
effect, if the Shareholder shall default (or be deemed by the pledgee to
be in default), then the Company shall at all times thereafter have the
immediate and continuing option to purchase the Pledged Stock (whether
still in Pledge or in the ownership of the pledgee or any other
transferee) upon notice by the Company to the Shareholder, pledgee or
other record holder, at the Net Book Value Per Share as of the date of
default and in current and immediately available funds within thirty (30)
days after notice has been given of election to purchase such shares or on
such other date as mutually agreed by the Company and the Shareholder,
pledgee or other recordholder, as the case may be.
7. Termination of Employment.
(A) In the event of the Shareholder's death, Disability or
termination from employment without Cause, or resignation after March 31,
1997 or termination for Cause after March 31, 1997, (i) the Shareholder or
the personal representative of the Shareholder's estate shall be required
to sell all Stock held or owned by such Shareholder, and the Company shall
be required to purchase all such Stock, at a purchase price per share
equal to the Valuation Formula Price as of the date of death, Disability
or termination or resignation after March 31, 1997, as the case may be;
and (ii) any shares of Stock granted to the Shareholder pursuant to
Section 2 hereof but not vested pursuant to Section 3 hereof shall
automatically be forfeited and returned to the Company and any dividend or
other distribution held in trust by the Company pursuant to Section 13
hereof and applicable to such shares shall automatically be forfeited to
the Company.
(B) In the event of the Shareholder's resignation from his
employment by Holdings or the Company prior to March 31, 1997 or Holdings
or the Company's termination of the Shareholder's employment for Cause
prior to March 31, 1997, (i) such Shareholder shall be required to sell
all Stock held or owned by such Shareholder, and the Company shall be
required to purchase all such Stock at a purchase price per share equal to
the Net Book Value Per Share as of the date of resignation or termination,
and (ii) any shares of Stock granted to the Shareholder pursuant to
Section 2 hereof but not vested pursuant to Section 3 hereof shall
automatically be forfeited and returned to the Company and any dividend or
other distribution held in trust by the Company pursuant to Section 13
hereof and applicable to such shares shall automatically be forfeited to
the Company.
(C) For purchases and sales pursuant to Section 7(A) or 7(B),
the purchase price shall be paid in current and immediately available
funds within thirty (30) days after such termination described in Section
7(A) or 7(B) or on such other date as mutually agreed by the Company and
the Shareholder or the personal representative of the Shareholder's
estate, as the case may be.
8. Involuntary Transfer. Whenever the Shareholder has any
notice or knowledge of any attempted, impending or consummated involuntary
Transfer of any of the Shareholder's Stock, whether by operation of law or
otherwise, the Shareholder shall give immediate written notice thereof to
the Company. Whenever the Company has any other notice or knowledge of
any such attempted, impending or consummated involuntary Transfer, it may
give written notice thereof to the Shareholder. In either case, the
Shareholder will forthwith disclose to the Company all pertinent
information in his possession relating thereto. If any Stock is subject
to any such involuntary Transfer, the Company shall at all times have the
immediate and continuing option to purchase such Stock upon notice by the
Company to the Shareholder or other record holder, at the Net Book Value
Per Share or in event of an involuntary transfer after March 31, 1997, at
the Valuation Formula Price as of the date of involuntary Transfer and in
current and immediately available funds within thirty (30) days after
notice has been given of election to purchase such shares or on such other
date as mutually agreed by the Company and the Shareholder or other record
holder, as the case may be, and Stock so purchased shall in every case be
free and clear of such Transfer.
9. Termination of Marital Relationship.
(A) If the marital relationship of the Shareholder and the
Spouse is terminated by the death of the Spouse or by divorce, annulment,
legal separation or other termination by judicial process ("Divorce") and
the Shareholder does not receive, or succeed to, all interests of the
Spouse in Stock acquired through marital property laws or otherwise,
whether by testamentary disposition, operation of law, property settlement
agreement, court order or otherwise, then the Shareholder will have the
option to purchase any part or all of the Spouse's interest in the Stock
and the Spouse or the personal representative of the Spouse's estate, as
the case may be, shall be obligated to sell such interest in the Stock at
the Net Book Value Per Share if prior to March 31, 1997, and thereafter at
the Valuation Formula Price as of the date of death or Divorce, as the
case may be, and in current and immediately available funds within thirty
(30) days after notice has been given (as provided for below) or on such
other date as mutually agreed by the Company, the Shareholder and the
Spouse or the personal representative of the Spouse's estate, as the case
may be.
(B) If the Shareholder elects to purchase the Spouse's interest
in the Stock in whole or in part, the Shareholder shall signify such
election and the portion of the Spouse's interest in the Stock to be
purchased by written notice delivered to the Spouse or the personal
representative of the Spouse's estate and to the Company within sixty (60)
days after the date of the Spouse's death or the effective date of the
Divorce.
(C) If the Shareholder fails to exercise such option in full
within such 60-day period, the Company shall, during the 60-day period
following the later of (i) the expiration of the 60-day period described
in Section 9(B) or (ii) the date upon which the Company shall receive
actual notice of the Spouse's death or Divorce, have the option to
purchase that portion of the Spouse's interest in the Stock not purchased
by the Shareholder upon written notice delivered within such latter 60-day
period to the Spouse or to the personal representative of the Spouse's
estate. If the Company elects to purchase that portion of the Spouse's
interest not purchased by the Shareholder as provided herein, the price
shall be the Net Book Value Per Share if prior to December 21, 1997, and
thereafter at the Valuation Formula Price as of the date of death or
Divorce, as the case may be, and such payment shall be in current and
immediately available funds within thirty (30) days after notice of such
election has been given or on such other date as mutually agreed by the
Company and the Spouse or the personal representative of the Spouse's
estate, as the case may be.
(D) Upon lapse in whole or in part of the Shareholder's and the
Company's option heretofore described, the Spouse or the personal
representative of the Spouse's estate, as the case may be, shall continue
to be bound by the provisions of this Agreement with respect to any
interest in the Stock not purchased pursuant to this Section 9; provided,
however, that the personal representative may transfer any part or all of
the Stock not so purchased pursuant to the terms of the Spouse's Last Will
and Testament or other estate planning documents or pursuant to the laws
of intestacy (if applicable) of the state of which the Spouse shall have
been a resident on the date of the Spouse's death (the transferee being
hereinafter referred to as "Transferee"); provided, further, that all
interests in the Stock so transferred shall continue to be subject to all
of the terms and conditions of this Agreement. The Shareholder's
obligation to sell or to offer to sell Stock pursuant to this Agreement
shall include an obligation on the part of the Spouse, the personal
representative of the Spouse's estate, or the Transferee to sell or to
offer to sell the interest in the Stock owned by such person in the same
manner and upon the same terms and conditions. In the absence of a court
order, no obligation to cause shares representing an interest in the Stock
owned by the Spouse, the personal representative of the Spouse's estate or
the Transferee to be registered in such person's name if such shares shall
then be registered in the Shareholder's name. The Company shall have the
right to require, as a condition to any transfer of Stock on the books of
the Company, that the Transferee execute a shareholders' agreement
substantially in the form of this Agreement.
10. Sale of the Company.
(A) In the event of an impending Sale of the Company, the
Company shall send prior written notice of such impending sale (the "Sale
Notice") to the Shareholder, which notice shall set forth the
consideration to be paid for each share of Stock and the terms and
conditions of the proposed sale. Within five (5) days after the date of
the Sale Notice, the Shareholder shall have the right to require, by
written notice to the Company, that all, but not less than all, of his
Stock, whether vested pursuant to Section 3 hereof or not, be included in
such sale, on substantially the same terms and conditions and for the same
or equivalent consideration as are available to other shareholders. If
the Sale of the Company is accomplished pursuant to a sale of
substantially all of the Company's assets, then the Company shall fulfill
its obligation under this Section by distributing to the Shareholder his
pro-rata share of the proceeds of such sale.
(B) If the Sale Notice so provides, the Shareholder shall be
required to sell all of his Stock at the same price, on the same terms and
conditions, at such time (which may be immediately) and in such manner as
specified in the Sale Notice.
11. Public Offering. In the event of a Public Offering,
Sections 4(A), 5, 6, 7, 8, 9, 10 and 11.1 of this Agreement shall
terminate; provided, however, that obligations to make payments, if the
event creating such obligations occurred prior to the Public Offering,
shall not hereby be terminated.
11.1 Exchange of Stock for WPL Holdings, Inc. Common Stock.
(A) Commencing on March 31, 1997 and on March 31 of each year
thereafter, or next succeeding business day if such date is not a business
day, (each such date separately the "Exchange Date"), the Shareholder
shall be entitled to exchange 33 1/3% of the shares of Stock owned by the
Shareholder on the Exchange Date for shares of Holdings Common Stock. If
the Shareholder does not exercise his exchange option on any Exchange
Date, he shall then be entitled to exchange the following Applicable
Percentage of shares of Stock owned on subsequent Exchange Dates.
Years from Applicable
Previous Exchange Date Percentage
1 33 1/3
2 55
3 70
4 80
5 100
When the remaining shares of Stock owned by the Shareholder
equal .5 shares or less, the next Applicable Percentage shall be 100%.
For purposes of such exchange, each share of Stock shall be
valued at the Valuation Formula Price and shares of Holdings Common Stock
shall be valued at their Fair Market Value. Fair Market Value of Holdings
Common Stock means average of the per share closing prices in its
principal trading market for the Holdings Common Stock for the five (5)
trading days next preceding the Exchange Date.
(B) All shares of Holdings Common Stock exchanged pursuant to
this Agreement will be subject to the following agreement: (i) the shares
may not be sold, transferred or otherwise alienated or hypothecated except
in compliance with the Securities Act of 1933 and applicable State
securities laws; and (ii) the Company may require the Shareholder to enter
into an appropriate agreement at the time of delivery of Holdings Common
Stock.
12. Voting Rights. The Shareholder shall have voting rights
for all Stock granted pursuant to Section 2 hereof regardless of whether
it has vested pursuant to Section 3 hereof.
13. Dividends and Other Distributions. Unless specifically
determined by the Board of Directors and reflected in written notice to
the Shareholder, no dividends or other distributions will be paid with
respect to the Stock owned by the Shareholder; provided, however, that
dividends may be paid on Stock owned by Holdings ("Holdings Stock")
respecting capital invested in the Company by Holdings after January 1,
1992, which dividends shall for purposes of this Agreement be deemed to be
return of capital to Holdings, and the Shareholder shall have no rights to
receive or participate pro rata or otherwise in such distributions. The
total amount of dividends on Holdings Stock shall not exceed the portion
of paid-in capital and retained earnings allocated to Holdings Stock. All
dividends on Holdings Stock shall be considered a repurchase of Holdings
Stock at the Valuation Formula Price next preceding the date of any
dividend payment. The Shareholder and Holdings recognize that the
agreements set forth in this Paragraph 13 result in the creation of two
(2) classes of Common Stock, no par value, of the Company and agree to
execute appropriate amendments to the Articles of Incorporation reflecting
such agreement.
14. Endorsement on Stock Certificates. Conspicuously noted on
each certificate representing Stock now owned or hereafter acquired by the
Shareholder (or his Spouse or transferee) shall be a legend reading
substantially as follows:
"ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR ANY OTHER
DISPOSITION OF THE SHARES OF STOCK REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED BY, AND SUBJECT TO, THE TERMS AND
PROVISIONS OF A RESTRICTED STOCK AGREEMENT DATED AS OF
_______________. A COPY OF SUCH AGREEMENT AND OF ALL AMENDMENTS
OR SUPPLEMENTS THERETO IS ON FILE IN THE OFFICE OF THE SECRETARY
OF THE COMPANY. BY ACCEPTANCE OF THIS CERTIFICATE, THE HOLDER
AGREES TO BE BOUND BY THE TERMS OF SAID AGREEMENT AND ALL
AMENDMENTS OR SUPPLEMENTS THERETO."
15. Certain Breaches. If the Shareholder refuses to deliver
stock certificates representing Stock in breach of this Agreement (as
determined by the Company's legal counsel), the Company shall have the
right to cancel the outstanding stock certificates owned or held by or in
the name of the Shareholder and to reissue stock certificates representing
such shares in the name of the Company and/or any Purchaser upon the
payment of the appropriate aggregate purchase price as provided herein,
and the defaulting Shareholder agrees to indemnify and hold the Company
and any Purchaser harmless from and against all costs, damages and
expenses as a result of such breach.
16. Certain Actions by the Company. The Shareholder agrees
that, if the Company is unable to make any purchase required of it
hereunder because of the provisions of applicable statutes or of its
Articles of Incorporation or By-Laws, the Company, the Shareholder, and
the Spouse, transferees and legal representatives of the Shareholder and
his/her Spouse shall take such corporate action as may be necessary to
permit the Company to make such purchase, including without limitation any
action necessary to recapitalize the Company to increase the surplus of
the Company to an amount adequate to pay the purchase price of the Stock
to be so purchased; provided, however, that the foregoing shall not be
construed to require any such person to make any additional personal
investment in the Company. Notwithstanding the foregoing, nothing
contained in this Agreement shall require the Company to purchase or
impose any liability upon the Company for failing to purchase Stock if
such purchase would render the Company insolvent or would be prohibited by
law or any applicable state or federal regulation. The Shareholder
further agrees that nothing in this Agreement shall in any way limit the
Company's rights to issue additional shares of Stock provided, however, in
the event that shares are issued at less than Net Book Value Per Share (or
if after March 31, 1997, the Valuation Formula Price) the Board shall make
such an equitable adjustment, as it shall determine in its reasonable
discretion in the price at which shares held by the Shareholder may be
repurchased by the Company.
17. Withholding Tax. If the Company determines that it is
required to withhold state or federal income tax or FICA tax as a result
of the vesting of the Shareholder's Stock, the Shareholder will make
arrangements satisfactory to the Company to enable it to satisfy such
withholding requirements. Notwithstanding the foregoing, the Shareholder
may elect, by written notice to the Company delivered ten (10) business
days prior to any regular date for the vesting of Stock pursuant to
Section 3 (or upon execution of this Agreement for Stock vesting upon such
execution), to satisfy the Shareholder's obligation under this Section as
to Stock vesting on such date by requesting the Company to purchase from
the Shareholder on the vesting date, at a price per share of Stock equal
to the Net Book Value Per Share, an amount of the Stock to be vested equal
in value to the lesser of (A) the amount the Company has determined it is
required to withhold on such date and (B) the amount set forth in the
Shareholder's request. The Company shall be obligated to comply with each
such request under this Section 17.
18. Termination. Except as otherwise provided herein, this
Agreement and all provisions thereof shall continue in force and effect
until terminated by a majority of the Board of Directors of the Company
and the Shareholder; provided, however, that obligations to make payments,
if the events creating such obligations occurred prior to the termination,
shall not hereby be terminated.
19. Notice. Every notice or request required or permitted
herein shall be in writing and shall be deemed given when delivered
personally, sent by telecopy or facsimile (with receipt acknowledged) or
mailed by United States registered or certified mail, return receipt
requested and postage prepaid, to the recipient. Such notice, request or
other communication will be sent to each party hereto at the addresses
indicated below, until some other address shall have been designated in a
written notice given in like manner:
(A) If to Holdings or the Company, to:
WPL Holdings, Inc.
Heartland Development Corporation
c/o WPL Holdings, Inc.
222 West Washington Avenue
P.O. Box 2568
Madison, Wisconsin 53701-2568
Attention: Edward M. Gleason
With a copy to:
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Attention: Benjamin F. Garmer, III
(B) If to the Shareholder or his Spouse, to:
Erroll B. Davis, Jr.
7829 Noll Valley Road
Verona, Wisconsin 53593
20. Severability, Governing Law and Effect of Invalid
Provisions. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect the other provisions hereof,
and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted. This Agreement shall be governed
by the laws of the State of Wisconsin.
21. Successors and Assigns. This Agreement and each provision
thereof (whether expressed or not) shall be binding upon and inure to the
benefit of Holdings, the Company, the Shareholder, the Spouse and their
respective successors, heirs, legatees, executors, personal
representatives and assigns.
22. Headings. The headings of this Agreement are intended
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
23. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute but one and the same instrument.
24. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof and may not be modified orally or in any manner other than by any
agreement in writing signed by all of the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
WPL HOLDINGS, INC.
("Holdings")
[Corporate Seal] By: /s/ Edward M. Gleason
Its: Vice President
HEARTLAND DEVELOPMENT CORPORATION
(the "Company")
[Corporate Seal] By: /s/ Edward M. Gleason
Its: Assistant Secretary
SHAREHOLDER
/s/ Erroll B. Davis, Jr.
Erroll B. Davis, Jr.
The undersigned Spouse of the Shareholder acknowledges that she
has read this Agreement and consents to its terms, to the disposition made
herein of any interest she may have in the Shareholder's Stock at any time
through marital property or otherwise and to the determination of purchase
price.
/s/ Elaine E. Davis
Name Elaine E. Davis