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ENERGY WEST INCORPORATED
RETENTION BONUS PLAN
THE ENERGY WEST INCORPORATED RETENTION BONUS PLAN (the "Plan") is hereby
adopted by Energy West Corporation, a Montana corporation (the "Company"), as of
this 14th day of September, 2000.
. 1 Purpose. The Company may from time to time consider transactions which
could result in a Change in Control (as defined below) of the
Company (a "Transaction"). The purpose of this Plan is to help the
Company retain key employees through a period of transition related to
such Transaction. The retention of key employees is critical to a
successful Transaction and the operations of the Company or any
successor to the Company after the Transaction.
2. Eligibility and Bonus Amount. The persons eligible to participate in
the Plan (the "Participants") and the amount of any retention bonus
awarded to any Participant (the "Bonus") will be determined by the
President and Chief Executive Officer of the Company.
3. Payment of Bonus. Each Bonus will be paid as soon as practicable
following a Change in Control. In order to receive a Bonus, the
Participant (i) must be employed by the Company on the date of the
Change in Control, (ii) must have performed his or her duties in a
satisfactory manner through the date of the Change in Control; and
(iii) must sign an agreement in a form and substance satisfactory to
the Company relative to the Plan ("Agreement").
4. Bonus Pool. The aggregate amount of all Bonuses shall not exceed
$1,500,000.
5. Limitation on the Amount of Each Bonus. Anything in this Plan to the
contrary notwithstanding, in the event it shall be determined that any
payment or distribution by the Company to or for the benefit of the
Participant (whether paid or payable or distributed or distributable
pursuant to the terms of this Plan or otherwise) (a "Payment") would
be nondeductible by the Company for federal income tax purposes
because of Section 280G of the Internal Revenue Code ("Code"), then
the aggregate present value of amounts payable or distributable as
severance benefits hereunder shall be reduced to the Reduced Amount.
The "Reduced Amount" shall be an amount expressed in present value
which maximizes the aggregate present value of such severance benefits
without causing any payment to be nondeductible by the Company because
of Section 280G of the Code. For purposes of this paragraph 5, present
value shall be determined in accordance with Section 280G of the Code.
6. Change in Control. For the purposes of this Plan, the term "Change in
Control" shall mean (i) the consummation of a reorganization, merger
or consolidation of the Company with another entity, unless the
shareholders of the Company immediately prior to the consummation of
such reorganization, merger or consolidation continue immediately
after the consummation to hold at least a majority of the voting
securities of the surviving entity; (ii) the consummation of a sale or
other transfer of all or substantially all of the assets of the
Company; (iii) the acquisition (other than from the Company) by any
person, entity or "group", within the meaning of Section 13(d)(3) or
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14(d)(2) of the Securities Exchange Act" of 1934 (the "Exchange Act")
(excluding, for this purpose, the Company or its affiliates ,or any
person, entity or group that has beneficial ownership at the date of
the adoption of this Plan of 50% of more of the outstanding shares of
common stock of the Company, or any employee benefit plan of the
company or its affiliates which acquires beneficial ownership of
voting securities of the Company) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or
more of either the then outstanding shares of common stock of the
Company or the Combined Voting Power of the Company's then outstanding
voting securities. "Combined Voting Power" means, as to any
corporation or other entity, the combined voting power of such
corporation's or other entity's then outstanding voting securities
generally entitled to vote in the election of directors, or comparable
governing body, or the combined voting power of any other entity's
voting securities which directly or indirectly has the power to elect
a majority of such directors or members of a comparable governing body
of such other entity; (iv) the individuals who, as of the date hereof,
constitute the Board of Directors of the Company (the "Board") (as of
the date hereof, the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors
of the Company, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) shall be, for purposes of this
subsection, considered as though such person were a member of the
Incumbent Board; or (v) any other event that the Board of Directors of
the Company (the "Board") shall determine in its sole discretion
constitutes a Change in Control of the Company.
7. Governing Law. The terms of this Plan will be interpreted in
accordance with the laws of the state of Montana.
8. Funding. The benefits under this Plan shall be paid from the general
assets of the Company.
9. Amendment and Termination. This Plan may be amended or terminated at
any time by the Board prior to the execution by the Company of a
definitive written agreement providing for a Change in Control or
after the termination of any such definitive agreement without the
consent of any Participant. No such amendment or termination shall be
made, however, after the occurrence of a Change in Control.
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IN WITNESS WHEREOF, the Company has hereby executed this Plan effective
as of the 14th day of September, 2000.
ENERGY WEST INCORPORATED
By:
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Name: Larry D. Geske
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Title: President and Chief Executive Officer
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