Exhibit 10.3
WISCONSIN ENERGY CORPORATION
OMNIBUS STOCK INCENTIVE PLAN AWARD
THIS AWARD, dated the 7th day of February, 2001, is granted by WISCONSIN ENERGY
CORPORATION (the "Company"), to [First_name] [Last_name] (the "Employee")
pursuant to the Company's 1993 Omnibus Stock Incentive Program (the "Plan") as
amended from time to time.
STOCK OPTION AWARD TERMS AND CONDITIONS
1. DEFINED TERMS
All capitalized terms used in this option and not otherwise defined herein are
defined in the attached Definitions or in the Plan.
2. OPTION GRANT
The Company grants to the Employee an option to purchase [Options] shares of
common stock of the Company (the "Common Stock") at an option price of $20.39
per share. Of this award, [ISO] shares are intended to qualify as an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). However, to the extent that the aggregate fair
market value (determined at the time of grant) of shares with respect to which
options intended to be treated as incentive stock options are exercisable for
the first time by the Employee during any calendar year under the Company and
its subsidiaries exceeds $100,000, the options or portions thereof which exceed
such limit (according to the order in which they are granted) shall be treated
as non-qualified stock options, in accordance with Code Section 422. There is no
assurance that the portion of this option intended to be treated as an incentive
stock option will in fact be treated as such.
3. VESTING OF OPTION
Except as otherwise provided herein, this option shall be exercisable only prior
to the Expiration Date (as defined in paragraph 4), and then only as set forth
in the following schedule:
Years from Date of Option Grant % of Shares Exercisable
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Less than 1 0%
At least 1 but less than 2 25%
At least 2 but less than 3 50%
At least 3 but less than 4 75%
At least 4 100%
Notwithstanding the foregoing, this option shall become immediately exercisable
upon the occurrence of any of the following events (the "Special Vesting
Events"):
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(i) the termination of the Employee's employment with the Company or a
subsidiary by reason of Retirement, Disability or death,
(ii) the termination of the Employee's employment with the Company or a
subsidiary by reason of discharge without Cause and not for reasons
relating to performance, or
(iii) the occurrence of a Change in Control of the Company while the
Employee is employed by the Company or a subsidiary.
Any unvested shares are immediately forfeited upon the Employee's cessation of
employment with the Company or a subsidiary prior to the occurrence of a Special
Vesting Event. However, the Committee may, in its discretion, vest options upon
separation.
4. TERM OF OPTION
All rights to exercise this option shall terminate on the Expiration Date which
is the earliest of the following dates:
(i) three months after the Employee's voluntary separation from
employment with the Company or a subsidiary prior to the occurrence
of a Special Vesting Event,
(ii) ten years from the date of grant after the Employee's termination of
employment with the Company or a subsidiary on or after the
occurrence of a Special Vesting Event, or
(iii) ten years from the date of grant.
With respect to any option covered by this award which is intended to qualify as
incentive stock options, the same shall not be treated as an incentive stock
option if it is exercised more than three months after any termination of the
Employee's employment, other than a termination caused by reason of permanent
and total disability within the meaning of Section 422(c)(6) of the Code (in
which case to preserve incentive stock option treatment, exercise must occur
within one year from such disability) or death.
5. METHOD OF EXERCISE
This option may be exercised only by appropriate notice in writing as determined
by the Company and accompanied by:
(i) a check for the full purchase price of the shares purchased, or
delivery of shares of Common Stock owned by the Employee and
acceptable to the Committee (or an attestation of the Employee's
ownership of such shares in lieu of delivery) valued at fair market
value on the date of exercise, or some combination of a check and use
of such shares (and shares acquired in a prior option exercise may
not be used for this purpose until the shares have been held by the
Employee for six months), and
(ii) such other documents or representations (and satisfaction of any
applicable tax withholding obligations) as the Company may reasonably
request in order to comply with securities, tax or other laws then
applicable to the exercise of the option. The portion of this option
intended to be treated as an incentive stock option shall not be
treated as an incentive stock option unless it is exercised within
the time limits permitted by applicable tax laws.
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6. NON-TRANSFERABILITY; DEATH; DESIGNATED BENEFICIARY
This option is not transferable by the Employee otherwise than by will or the
laws of descent and distribution, except for transfers to family members and
family partnerships, and is exercisable during the Employee's lifetime only by
the Employee.
If the Employee dies after termination of employment without any Special Vesting
Event having occurred but during the option period and before the Expiration
Date specified in paragraph 4 hereof, this option may be exercised, to the
extent otherwise vested, in whole or in part and from time to time, in the
manner described in paragraph 5 hereof, by the Employee's "Designated
Beneficiary" (defined below) or if none or if the Designated Beneficiary does
not survive the Employee, by the Employee's estate or the person to whom the
option passes by will or the laws of descent and distribution, but only within a
period of:
(a) two years after the Employee's death or
(b) ten years from the date hereof, whichever period is shorter.
To the extent that this option may be exercisable after the death of the
Employee (whether before or after termination of employment), this option may be
exercised by the "Designated Beneficiary" of the Employee. The "Designated
Beneficiary" shall be the beneficiary or beneficiaries designated by the
Employee in a writing filed with the Committee in such form and at such time as
the Committee may require. In the absence of a living Designated Beneficiary,
any rights or benefits that would have been exercisable by or distributable to
the Employee shall be exercised by or distributed to the legal representative of
Employee's estate or the person to whom the option passes by will or by the laws
of descent and distribution. If a Designated Beneficiary who has survived the
Employee dies before exercise of all rights or before complete distribution of
benefits under this option, then any rights that would have been exercisable by
the Designated Beneficiary shall be exercised by the legal representative of the
estate of the Designated Beneficiary, and any benefits distributable to the
Designated Beneficiary shall be distributed to the legal representative of the
estate of the Designated Beneficiary.
7. REGISTRATION
If at any time during the option period the Company shall be advised by its
counsel that shares deliverable upon exercise of the option are required to be
registered under the Securities Act of 1933 ("Act") or any state securities
laws, or that delivery of the shares must be accompanied or preceded by a
prospectus meeting the requirements of that Act or such state securities laws,
the Company will use its best efforts to effect the registration or provide the
prospectus not later than a reasonable time following each exercise of this
option, but delivery of shares by the Company may be deferred until the
registration is effected or the prospectus is available. The Employee shall have
no interest in shares covered by this option until certificates for the shares
are issued, or in lieu of certificates, shares are credited to the Employee's
account in the book-entry form.
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8. ADJUSTMENTS
If the Company shall at any time change the number of shares of its Common Stock
without new consideration to the Company (such as by stock dividend, stock split
or similar transaction), the total number of shares then remaining subject to
purchase hereunder shall be changed in proportion to the change in issued shares
and the option price per share shall be adjusted so that the total consideration
payable to the Company upon the purchase of all shares not theretofore purchased
shall not be changed. If during the term of this option, the Common Stock of the
Company shall be changed into another kind of stock or into securities of
another corporation, cash, evidence of indebtedness, other property or any
combination thereof (the "Acquisition Consideration"), whether as a result of
reorganization, sale, merger, consolidation, or other similar transaction, the
Committee shall cause adequate provision to be made whereby the Employee shall
thereafter be entitled to receive upon the due exercise of this option the
Acquisition Consideration the Employee would have been entitled to receive for
Common Stock acquired through exercise of this option immediately prior to the
effective date of such transaction.
9. NOTICE OF DISPOSITION
If the Employee disposes of any shares acquired on the exercise of the incentive
stock option within either (a) two years after the date of option grant or (b)
one year after the date of option exercise, the Employee agrees to notify the
Company within seven days of such disposition.
10. WITHHOLDING
Employee may satisfy any tax withholding obligations arising with respect to the
exercise of any option not being treated as an incentive stock option in whole
or in part by tendering a check to the Company for any required amount, by
election to have a portion of the shares that would otherwise be issued withheld
to defray all or a portion of any applicable taxes, or by election to have the
Company or its subsidiaries withhold the required amounts from other
compensation payable to the Employee.
11. IMPACT ON OTHER BENEFITS
The income attributable to the exercise of this option shall not be includable
as compensation or earnings for purposes of any other benefit plan or program
offered by the Company or its subsidiaries.
12. PLAN GOVERNS
Notwithstanding anything in this option, the terms of this option shall be
subject to the terms of the Plan, a copy of which may be obtained by the
Employee from the Secretary of the Company, and this option is subject to all
interpretations, amendments, rules and regulations established by the Committee
from time to time pursuant to the Plan.
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DEFINITIONS
The following definitions shall apply to the stock option award granted
February 7, 2001.
As used in the option award, the terms set forth below shall have the following
meanings:
(a) "Cause" means:
(i) the willful and continued failure of the Employee to
substantially perform the Employee's duties (other than a failure
resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the
Employee by the Board of Directors of the Company, the Compensation
Committee or an elected officer of the Company which specifically
identifies the manner in which the Board, the Committee or the elected
officer believes that the Employee has not substantially performed the
Employee's duties, or
(ii) the willful engaging by the Employee in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Company. However no act, or failure to act, on the Employee's part
shall be considered "willful" unless done, or omitted to be done, by
the Employee not in good faith and without reasonable belief that the
Employee's action or omission was in the best interest of the Company.
(b) "Disability" means separation from the service of the Company or a
subsidiary because of such illness or injury as renders the Employee unable
to perform the material duties of the Employee's job.
(c) "Retirement" means separation from the Service of the Company or a
subsidiary either at or after attainment of age 55 and completion of at
least ten years of service or at or after age 65.
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RESTRICTED STOCK AWARD TERMS AND CONDITIONS
13. AWARD
The Company grants to the Employee a restricted stock award on February 7, 2001
(the "Award Date"), covering [Restricted] shares of the common stock of the
Company (the "Restricted Stock").
14. RESTRICTION
The Restricted Stock shall become vested upon the first to occur, if any, of the
following events:
(a) The termination of the Employee's employment with the Company or a
subsidiary by reason of retirement, disability, or death. For these
purposes, "retirement" shall mean separation from the service of the
Company at or after the attainment of age 60, and "disability" shall
mean separation from the service of the Company because of such
illness or injury as renders the Employee unable to perform the
material duties of the Employee's job.
(b) The occurrence of a Change of Control of the Company as defined in
paragraph 11 of the Plan, while the Employee is employed by the
Company.
(c) Ten years from the date of this Award.
The period of time during which the shares covered by this Restricted Stock
Award are forfeitable is referred to as the "Restricted Period". If the
Employee's employment with the Company or one of its subsidiaries terminates
during the Restricted Period for any reason other than as specified in
subsection (a) above, the Restricted Stock shall be forfeited to the Company on
the date of such termination, without any further obligations of the Company to
the Employee and all rights of the Employee with respect to the Restricted Stock
shall terminate. The Compensation Committee may, in its discretion, vest shares
upon separation.
15. PERFORMANCE ACCELERATION GOALS
Notwithstanding Section 14, restrictions will be removed on ten percent of the
Restricted Stock and on any additional restricted shares acquired with cash
dividends on such Restricted Stock or acquired as a result of stock dividends
thereon for every year, on a cumulative basis, in which the schedule of
cumulative earnings identified in Appendix A is met or exceeded. An illustration
regarding the removal of restrictions based on this Section is set forth in
Appendix A and made a part of this award. If the Company shall, at any time
during the Restricted Period, change the number of its issued and outstanding
shares of common stock by means of a stock dividend or a stock split without new
consideration to the Company, the schedule of cumulative earnings identified in
Appendix A shall be adjusted accordingly so that the incentive targets
represented by such schedule are preserved. In the event of any other change in
the capital structure of the Company or any other event regarding the Company
during the Restricted Period, the Compensation Committee may make such
adjustment, if any, respecting such schedule as it considers desirable. The
Compensation Committee may, in its discretion, permit earlier vesting.
16. RIGHTS DURING RESTRICTED PERIOD
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The Employee, during the Restricted Period, shall have the right to vote the
Restricted Stock; however, all cash dividends, stock dividends, stock rights or
other securities issued with respect to the Restricted Stock (collectively, the
"Proceeds") shall be forfeitable and subject to the same restrictions as exist
regarding the original shares of Restricted Stock. All cash dividends will be
used to acquire additional restricted shares. The Restricted Stock shall be
nontransferable during the Restricted Period, except by will or the laws of
descent and distribution.
17. CUSTODY
The Restricted Stock may be credited to the Employee in book entry form and
shall be held, along with any Proceeds, in custody by the Company or an agent
for the Company (including, as determined by the Company, under the Company's
Stock Plus Plan and any Proceeds may be applied as directed by the Company)
until the applicable restrictions have expired. If any certificates are issued
for shares of Restricted Stock or any of the Proceeds during the Restricted
Period, such certificates shall bear an appropriate legend as determined by the
Company referring to the applicable terms, conditions and restrictions and the
Employee shall deliver a signed, blank stock power to the Company relating
thereto.
18. TAX WITHHOLDING
The Employee may satisfy any tax withholding obligations arising with respect to
the Restricted Stock in whole or in part by tendering a check to the Company for
any required amount, by election to have a portion of shares withheld to defray
all or a portion of any applicable taxes, or by election to have the Company or
its subsidiaries withhold the required amounts from other compensation payable
to the Employee.
19. IMPACT ON OTHER BENEFITS
The value of the Restricted Stock awarded hereunder, either on the award date or
at the time such shares become vested, shall not be includable as compensation
or earnings for purposes of any other benefit plan or program offered by the
Company or its subsidiaries.
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By my signature below, I hereby acknowledge receipt of the stock option and
restricted stock grant on the date shown above, which has been issued to me
under the terms and conditions of the Plan. I further agree to all of the terms
and conditions of this award and the Plan.
Signature: __________________________________ Date: ____________________
[First_name] [Last_name]
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