Exhibit (4.2)
[WPL Holdings/WP&L]
[Date]
TO: [Name]
Congratulations on your selection as Participant in the WPL Holdings, Inc.
Long-Term Equity Incentive Plan (the "Plan"). This Agreement provides a
brief summary of your rights under the Plan.
The attached Plan document provides the complete details of all of your
rights under the Plan and this Agreement, as well as all of the conditions
and limitations affecting such rights. If there is any inconsistency
between the terms of this Agreement and the terms of the Plan, the Plan's
terms shall completely supersede and replace the conflicting terms of this
Agreement. All capitalized terms appearing in this Agreement shall have
the meanings defined in the Plan.
The Option granted to you under this Agreement is a non-qualified Option,
as defined in the Plan. The Performance Unit is intended to accumulate
all of the dividends paid on one share of WPLH common stock over a three-
year period. The value appreciation award is to reflect the increased
value generated at the Heartland Development Corporation.
OVERVIEW OF YOUR AWARD
1. a. Number of shares under this Option: ________
b. HDC value appreciation
Standard equity percentage: percent
Premium equity percentage: percent
2. Date of grant: ___________
3. Grant price of stock Option: $__________
4. a. Vesting of Options: Subject to the terms of the Plan, the
shares covered by this Option shall vest three (3) years
following the grant date.
b. Performance Unit payout: Subject to the terms of the Plan,
Performance Units will be paid in a combination of 60 percent
WPLH shares and 40 percent cash as soon as practicable at the
end of each three-year performance cycle, but not later than
seventy-five days following the end of the performance cycle.
c. Value Appreciation Awards: Vested awards will be paid out at
the end of the three years from the award date.
5. Expiration date of Stock Option: ___________
6. Termination of Employment - Stock Options:
a. Termination by Death: In the event of employment termination by
reason of death, all outstanding Options shall immediately vest
one hundred percent (100%) and shall remain exercisable at any
time prior to their expiration date or for one (1) year after
the date of death, whichever period is shorter, by such person
or persons as shall have been named as the Participant's
beneficiary, or by such persons that have acquired the
Participant's rights under the Option by will or by the laws of
descent and distribution.
b. Termination by Disability: In the event of employment
termination by reason of disability, all outstanding Options
granted shall immediately vest one hundred percent (100%) as of
the date the Committee determined the definition of disability
to have been satisfied, and shall remain exercisable at any time
prior to their expiration date, or for one (1) year after the
date that the Committee determines the definition of disability
to have been satisfied, whichever period is shorter.
c. Termination by Retirement: In the event of employment
termination by reason of Retirement, all outstanding Options
granted shall immediately vest one hundred percent (100%), and
shall remain exercisable at any time prior to their expiration
date, or for three (3) years after the effective date of
retirement, whichever period is shorter.
d. Employment Termination Followed by Death: In the event of
employment termination by reason of disability or retirement,
and within the exercise period following such termination the
Participant dies, then the remaining exercise period under
outstanding Options shall equal the longer of: (i) one (1) year
following death, or (ii) the remaining portion of the exercise
period which was triggered by the employment termination. Such
Options shall be exercisable by such person or persons who shall
have been named as the Participant's beneficiary, or by such
persons who have acquired the Participant's rights under the
Option by will or by the laws of descent and distribution.
e. Termination of Employment for Other Reasons: If the employment
of a Participant shall terminate for any reason other than the
reasons set forth in Section 6 herein (and other than for
cause), all Options held by the Participant which are not vested
as of the effective date of employment termination immediately
shall be forfeited to the Company.
Options which are vested as of the effective date of employment
termination may be exercised by the Participant within the
period beginning on the effective date of employment
termination, and ending three (3) months after such date. If
the employment of a Participant shall be terminated by the
Company for cause, all outstanding Options held by the
Participant immediately shall be forfeited to the Company and no
additional exercise period shall be allowed, regardless of the
vested status of the Options.
7. Termination of Employment - Performance Units:
a. Termination of Employment due to Death, Disability, Retirement,
or Involuntary Termination without Cause: In the event the
employment of a Participant is terminated by reason of death,
disability, retirement or involuntary termination without cause
during a performance period, the Participant shall receive a
prorated payout of the Performance Units. The prorated payout
shall be determined by the Committee, in its sole discretion,
and shall be based upon the length of time that the Participant
held the Performance Units during the performance period, and
shall further be adjusted based on the achievement of the
preestablished performance goals.
Payment of earned Performance Units shall be made at the same
time payments are made to Participants who did not terminate
employment during the applicable performance period.
b. Termination of Employment for Other Reasons: In the event that
a Participant's employment terminates for any reason other than
those reasons set forth in Section 7(a) herein, all Performance
Units shall be forfeited by the Participant to the Company.
8. Termination of Employment - Value Appreciation Awards.
a. Termination of employment due to death, disability, retirement,
or involuntary termination without cause: All vested value
appreciation awards will be paid in cash, and all unvested
awards will be forfeited.
b. Termination of Employment for Other Reasons: In the event that
a Participant's employment terminates for any reason other than
those reasons set for in Section 8(a) herein, all Performance
Units shall be forfeited by the Participant to the Company.
9. Change in Control: Upon the occurrence of a change in control:
a. All Options shall become immediately exercisable;
b. The target payout opportunity attainable under all outstanding
Performance Units shall be deemed to have been fully earned for
the entire performance period(s) as of the effective date of the
change in control, and within thirty (30) days following the
effective date of the change in control, a pro rata portion of
the target payout opportunity will be paid in cash, based on the
number of complete and partial calendar months within the
performance period which had elapsed as of such effective date;
provided, however, that there shall not be an accelerated payout
with respect to Performance Units which were granted less than
six (6) months prior to the effective date of the change in
control;
10. Withholding:
a. Tax Withholding: The Company shall have the right to deduct or
withhold, or require a Participant to remit to the Company, and
amount sufficient to satisfy Federal, state and local taxes
(including the Participant's FICA obligation) required by any
awards to Participants under law to be withheld with respect to
any taxable event arising or as a result of this Plan.
b. Share Withholding: With respect to withholding required upon
the exercise of Options, or upon any other taxable event arising
as a result of awards granted hereunder, Participants may elect
to satisfy the withholding requirement, in whole or in part, by
having the Company withhold shares having a fair market value on
the date the tax is to be determined equal to the minimum
statutory total tax which could be imposed on the transaction.
(i) Awards Having Exercise Timing Within Participants'
Discretion. The participant must either:
A. Deliver written notice of the stock withholding
election to the Committee at least six (6) months
prior to the date specified by the participant on
which the exercise of the award is to occur; or
B. Make the stock withholding election in connection with
an exercise of an award which occurs during a window
period.
(ii) Awards Having a Fixed Exercise/Payout Schedule Which is
Outside Participant's Control. The participant must
either:
A. Deliver written notice of the stock withholding
election to the Committee at least six (6) months
prior to the date on which the taxable event (e.g.,
exercise or payout) relating to the award is scheduled
to occur; or
B. Make the stock withholding election during a window
period which occurs prior to the scheduled taxable
event relating to the award (for this purpose, an
election may be made prior to such a window period,
provided that it becomes effective during a window
period occurring prior to the applicable taxable
event).
Please acknowledge your Agreement to Participant in the Plan and this
Agreement, and to abide by all of the governing terms and provisions, by
signing the following representation:
Agreement to Participate
By signing a copy of this Agreement and returning it
to Mark Emmrich, Human Resources Department, G.O. 7, I
acknowledge that I have read the Plan, and that I
fully understand all of my rights under the Plan, as
well as all of the terms and conditions which may
limit my eligibility to exercise these awards.
Without limiting the generality of the preceding
sentence, I understand that my right to exercise these
awards is conditioned upon my continued employment
with the Company.
___________________________________
Participant
Please refer any questions you may have regarding your award to me. Once
again, congratulations on receipt of your award.
Sincerely,
Erroll B. Davis, Jr.
President and Chief Executive Officer