Exhibit 10(b)
Form of Notice and Acceptance of Grant of
Restricted Stock.
[DATE]
[NAME]
[ADDRESS]
Re: Notice and Acceptance of Grant of Restricted Stock
and Allocation of Opportunity Shares - 2000 Performance Cycle
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Dear [NAME]:
The Compensation Committee of the Board of Directors (the "Committee") of Cleco
Corporation (the "Company") appointed to administer the Cleco Corporation 2000
Long-Term Incentive Compensation Plan (the "Plan") has granted and allocated to
you certain incentives related to shares of the Company's $2.00 par value voting
common stock (the "Common Stock"). This letter is intended to provide you with
notice of the terms and conditions applicable to your grant and allocation. By
execution below, you acknowledge and agree to be bound by the terms and
conditions described herein and the provisions of the Plan. Unless otherwise
defined below, capitalized terms used herein shall have the meanings ascribed to
them in the Plan.
1. SHAREHOLDER APPROVAL. The Plan and your grant and allocation thereunder are
subject to the approval of the Company's shareholders, which the Committee
intends to use its best efforts to obtain. In the event shareholder approval is
not obtained before January 1, 2001, the grant and allocation described herein
shall be void.
2. GRANT OF RESTRICTED STOCK. The Committee grants to you an aggregate of
[NUMBER] shares of Common Stock (the "Restricted Stock"), provided that during
the 2000 Performance Cycle (as defined below), such shares:
a. Shall not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of; and
b. Shall be canceled and forfeited, without the payment of consideration
by the Company, if you are notified that the Company has not achieved
the Performance Objectives established for the 2000 Performance Cycle
or your employment with the Company and/or its Affiliates terminates
for any reason, except as provided in paragraph 6 hereof.
The Company has issued in your name a certificate or certificates for the
Restricted Stock. Pending the lapse of the restrictions described above or the
cancellation and forfeiture of the Restricted Stock, you agree that the
certificate or certificates will be held by the Company in escrow. You also
agree to execute stock powers endorsed in blank, if requested by the Committee.
During the 2000 Performance Cycle, you are entitled to the rights of a
shareholder with respect to the Restricted Stock, including the right to vote
the shares and to receive dividends if, as and when declared by the Board of
Directors of the Company.
3. ALLOCATION OF OPPORTUNITY SHARES. The Company has also recorded in a
bookkeeping account established and maintained for your benefit a contingent
allocation of [NUMBER] units, representing shares of Common Stock (the
"Opportunity Shares"). While Opportunity Shares are allocated to your account,
you are not treated as a shareholder of the Company with respect to the
Opportunity Shares, and you have no right to receive dividends or vote the
shares.
4. PERFORMANCE OBJECTIVES. A summary of the Performance Objectives established
for the period beginning as of January 1, 2000, and ending December 31, 2002
(the "2000 Performance Cycle") is attached hereto as Exhibit A. The summary is
subject to the provisions of the Plan, including provisions authorizing the
Committee to interpret the Plan, to determine the degree to which the Company
achieves the Performance Objectives, and to adjust or amend the Performance
Objectives during the 2000 Performance Cycle.
As soon as practicable after the end of the 2000 Performance Cycle, the
Committee will notify you of the number of shares of Restricted Stock, if any,
that are no longer subject to restriction and the number of Opportunity Shares,
if any, to be transferred or issued to you in the form of Common Stock from your
bookkeeping account. The amount will be determined by the Committee, based upon
whether the Company has achieved the threshold, target or maximum Performance
Objectives for the 2000 Performance Cycle, as follows:
PERFORMANCE RESTRICTED OPPORTUNITY
OBJECTIVE SHARES SHARES
--------- ------ ------
THRESHOLD --
TARGET --
MAXIMUM --
Shares of Restricted Stock and Opportunity Shares that are not transferred or
issued to you will be forfeited and the affected certificates canceled by the
Company.
5. FURTHER LIMITATIONS. A purpose of the Company in granting Restricted Stock
and allocating Opportunity Shares is to encourage you to become a long-term
shareholder of the Company. Consistent with this purpose, you agree that if
Restricted Stock is transferred to you free of restriction or Opportunity Shares
are transferred to you in the form of Common Stock, you will not sell, assign or
otherwise dispose of such Common Stock, without the prior consent of the
Company. This restriction will remain in effect during the period commencing as
of January 1, 2003, and ending as of the earlier of (a) the date you cease to be
an employee of the Company or an Affiliate, or (b) January 1, 2006. You agree
that shares of Common Stock subject to this restriction may be held by the
Company, in escrow, pending lapse.
6. TERMINATION OF EMPLOYMENT. If your employment with the Company and its
Affiliates is terminated prior to the expiration of the 2000 Performance Cycle,
Restricted Stock granted to you in accordance with paragraph 2 hereof and
Opportunity Shares allocated to you in accordance with paragraph 3 hereof will
be forfeited as of the date of your termination, except that:
a. If your employment with the Company and its Affiliates is terminated
during the 2000 Performance Cycle on account of your Retirement (as
defined in the Plan) on or after age 65, all Performance Objectives
shall be deemed satisfied and all restrictions shall lapse with
respect to the number of shares of Restricted Stock granted to you in
paragraph 2 hereof and all Opportunity Shares allocated to you in
paragraph 3 hereof shall be transferred to you in the form of Common
Stock.
b. If your employment with the Company is terminated during the 2000
Performance Cycle on account of your death, disability or Retirement
prior to age 65 or such termination is involuntary, but not on account
of Cause, all Performance Objectives shall be deemed satisfied and all
restrictions shall lapse with respect to the number of shares of
Restricted Stock granted to you in paragraph 2 hereof and the
Opportunity Shares allocated to you in paragraph 3 hereof shall be
transferred in the form of Common Stock, each in a pro rated amount
determined by multiplying the number of shares of Restricted Stock or
Opportunity Shares granted or allocated by a fraction (i) the
numerator of which is the number of days lapsed in the 2000
Performance Cycle as of the date of your termination of employment,
and (ii) the denominator of which is the total number of days in such
period.
If your employment with the Company or any Affiliate is terminated on
account of Cause during the period described in paragraph 5 hereof,
you agree that all Common Stock acquired on the lapse of restrictions
and/or the transfer of Opportunity Shares will be forfeited and
canceled as of the date of such termination, without requirement of
further notice. For this purpose, the term "Cause" generally means
that you commit an intentional act of fraud, embezzlement or theft
during your employment, you engage in intentional misconduct that is
materially injurious to the Company (or an Affiliate), you wrongfully
disclose confidential information, you intentionally damage the
property of the Company or you intentionally refuse to perform your
material job duties. The Committee determines whether any termination
is on account of Cause.
7. CHANGE IN CONTROL. Notwithstanding any provision of the Plan or this
agreement to the contrary, upon the occurrence of a Change in Control, all
Performance Objectives shall be deemed satisfied and all restrictions and
limitations shall lapse as to the aggregate number of shares of Restricted Stock
granted to you in paragraph 2 hereof and shares of Common Stock equal to the
number of Opportunity Shares allocated to you in paragraph 3 hereof shall be
transferred to you, free of restriction. If your employment with the Company is
subject to a severance agreement, employment agreement or similar document
defining the term "Change in Control," the definition contained in such document
shall govern; otherwise, the term "Change in Control" shall be determined in
accordance with the terms of the Plan.
Unless you are or become a party to a separate written agreement with the
Company that provides to the contrary, the Plan provides no portion of the
payments you receive from the Company or an Affiliate on account of a Change in
Control, including Common Stock under this paragraph 7, can be characterized as
an "excess parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended. If an excess parachute payment is otherwise
payable to you on account of a Change in Control, you may be required to forfeit
some or all of the Common Stock transferable hereunder to comply with this
limitation.
8. BUSINESS TRANSACTIONS. If your employment with the Company or an Affiliate is
involuntarily terminated on account of a Business Transaction and not on account
of Cause, all Performance Objectives shall be deemed satisfied and all
restrictions shall lapse as to the Restricted Stock granted to you in paragraph
2 hereof and shares of Common Stock equal to the number of Opportunity Shares
allocated to you in paragraph 3 hereof shall be transferred to you, free of
restriction. For this purpose, the term "Business Transaction" is defined in the
Plan as the sale, lease or other disposition of all or a substantial portion of
the assets of an Affiliate or the sale or other disposition of all or
substantially all of the issued and outstanding stock or other equity interests
of an Affiliate. The Committee determines whether any sale, lease or disposition
is a Business Transaction.
9. TAX PAYMENTS. If the restrictions lapse with respect to all or part of the
Restricted Stock or if Opportunity Shares are transferred to you, the Company
agrees to pay you in the year following the close of the 2000 Performance Cycle
(or such earlier time that Restricted Stock or Opportunity Shares are taxable)
an amount determined by the Committee which will be sufficient to pay your
federal, state and local taxes (assuming your highest marginal rate of tax based
upon the compensation you receive from the Company and/or its Affiliates
applicable in the year in which such payment is made) with respect to such
Restricted Stock, Opportunity Shares and such cash payment. You agree that:
a. If Restricted Stock is released to you or Opportunity Shares are
transferred or issued to you by the Company, you will, no later than
the date of such release, transfer or issuance, pay to the Company, or
make arrangements satisfactory to the Committee regarding payment of,
any federal, state or local taxes required by law to be withheld by
the Company with respect to such Restricted Stock and Opportunity
Shares; and
b. The Company and its Affiliates shall, to the extent permitted by law,
have the right to deduct from any payments otherwise due to you any
federal, state or local taxes required by law to be withheld.
10. NO ASSIGNMENT. The grant and allocation described herein shall not be
subject in any manner to sale, transfer, pledge, assignment or other encumbrance
or disposition, whether by operation of law or otherwise and whether voluntarily
or involuntarily, except by will or the laws of descent and distribution.
11. ADDITIONAL REQUIREMENTS. You acknowledge that Common Stock acquired
hereunder may bear such legends as the Committee or the Company deems
appropriate to comply with applicable Federal or state securities laws or under
the terms of the Plan. In connection therewith and prior to the issuance of such
shares, you may be required to deliver to the Company such other documents as
may be reasonably required to ensure compliance with applicable Federal or state
securities laws.
12. EMPLOYMENT RIGHTS. Neither this agreement nor the grant of Restricted Stock
or allocation of Opportunity Shares shall be deemed to confer upon you any right
to continue in the employ of the Company or any Affiliate or interfere, in any
manner, with the right of the Company or an Affiliate to terminate your
employment, whether with or without cause, in its sole discretion.
13. AMENDMENT. The terms and conditions set forth herein may be amended by the
written consent of the parties hereto.
Very truly yours,
CLECO CORPORATION
ACKNOWLEDGMENT AND AGREEMENT
I acknowledge that the Restricted Stock granted and Opportunity Shares
allocated hereunder shall be subject to such additional terms and conditions as
may be imposed under the terms of the Plan, in addition to the terms and
conditions of this agreement. I understand that my grant and allocation is
subject to shareholder approval and that if approval is not obtained, they will
be void. By execution of this agreement, I acknowledge that I have received a
copy of the Plan and that no member of the Committee shall be liable for any
action or determination taken in good faith with respect to the Plan or any
grant or award hereunder.
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Signature
Date:
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EXHIBIT A
CLECO CORPORATION
2000 LONG-TERM INCENTIVE COMPENSATION PLAN
PERFORMANCE OBJECTIVES
The Cleco Corporation 2000 Long-Term Incentive Compensation Plan (the
"Plan") requires the Compensation Committee of the Board of Directors (the
"Committee") of Cleco Corporation (the "Company") to establish performance
measures for each Performance Cycle.
For the 2000 Performance Cycle, the Plan uses comparative performance as a
qualifier, with the actual awards being determined based on the extent to which
the Company achieves its longer-term financial goals. The comparative
performance measure approved is the relative price appreciation plus dividends
paid per share on Common Stock during the 2000 Performance Cycle ("Total
Return") as compared to the Total Return of selected peer companies (see
Attachment B). The Company's Total Return must rank at the 40th percentile level
in order for any award to be paid.
Actual awards are determined by the Committee based on the Company's
performance on two additional measures: (1) Return on Income, and (2) Growth in
Net Income (see Attachment A for Long-Term Incentive Plan Performance Matrix).
Restrictions will lapse upon receipt by you of written notice from the
Committee that the Company has achieved the Performance Objectives established
for the 2000 Performance Cycle; notice will be given by the Committee as soon as
practicable after the close of the cycle.