INTEGRYS ENERGY GROUP, INC. NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit
10.11
THIS
AGREEMENT is
entered into as of February 14, 2008 (the “Grant Date”), by and between INTEGRYS
ENERGY GROUP, INC. (the “Company”), and __________________ ____________________
(the “Optionee”). This Agreement sets forth the terms, rights and
obligations of the parties with respect to the grant of an option to the
Optionee. This option shall not become effective until the Optionee
signs and returns the “Acknowledgement Form” attached hereto.
The
option is
granted under, and is subject to, the terms of the Integrys Energy Group, Inc.
2007 Omnibus Incentive Compensation Plan (the “Plan”), which are specifically
incorporated by reference in this Agreement. Any terms used in this
Agreement which are not defined shall have the meaning set forth in the
Plan.
The
parties to this
Agreement covenant and agree as follows:
1. Grant
of
Option. Subject to the terms of this Agreement, the Company
grants to the Optionee the right and option (the “Option”) to purchase ______
shares of Common Stock of the Company, par value $1.00 (the “Optioned Shares”)
from the Company, at an option price per share equal to $48.36 (the closing
sales price of a share of Common Stock of the Company as reported on the New
York Stock Exchange Composite Transaction reporting system on February 14,
2008).
In
the event of
certain corporate transactions described in Section 12 of the Plan, the number
of Optioned Shares and the per share option price will be adjusted by the
Compensation Committee of the Board of Directors of the Company (the
“Committee”). The Committee’s determination as to any adjustment
shall be final.
2. Vesting
of
Option. The Optioned Shares will vest in accordance with the
following schedule:
Percentage
of Optioned
Shares
Vested Date
of Vesting
25%
1st anniversary of Grant Date
An
additional
25% 2nd
anniversary of Grant Date
An
additional
25%
3rd anniversary of Grant Date
The
final
25%
4th anniversary of Grant Date
provided,
however, that, in
the event of the Optionee’s termination of employment from the Company and its
Affiliates for any reason, any Optioned Shares not vested as of the
date of such termination will be cancelled, except as otherwise provided in
this
Section 2..
If
the Optionee’s employment or service
terminates as a result of death or disability (as determined by the Committee
based upon the definition set forth in the Company’s
long-term
disability plan), (1) if the Optionee’s termination occurs on or after December
31 of the calendar year in which occurs the Grant Date, the Optioned Shares
will
become fully vested on the Optionee’s date of termination, or (2) if the
Optionee’s termination occurs prior to December 31 of the calendar year in which
occurs the Grant Date, the Optionee will become partially vested on the date
of
termination, and the remaining Optioned Shares will be cancelled. The
Optionee’s partially vested interest will be equal to the product obtained by
multiplying the total number of Optioned Shares by a fraction, the numerator
of
which is the number of full months of service that the Participant completed
during the calendar year in which occurs the Grant Date and the denominator
of
which is twelve (12). If the foregoing calculation results in vesting
of a factional Optioned Share, the number of Optioned Shares that become vested
will be rounded to the next higher whole number of shares.
If
the Optionee’s employment or service
terminates as a result of retirement on or after age fifty-five (55) with ten
(10) or more years of service, or retirement on or after age sixty-two (62)
(“Retirement”), (1) if the Optionee’s retirement occurs on or after December 31
of the calendar year in which occurs the Grant Date, the Optioned Shares will
continue to vest, subject to the terms of the Plan, on the same schedule as
would have applied had the Optionee continued employment, and (2) if the
Optionee’s retirement occurs prior to December 31 of the calendar year in which
occurs the Grant Date, a portion of the Optioned Shares will be immediately
forfeited, and the remainder of the Optioned Shares will continue to vest,
subject to the terms of the Plan, on the same schedule as would have applied
had
the Optionee continued employment. The portion of the Optioned
Shares that
are immediately forfeited will be equal to the product obtained by multiplying
the total number of Optioned Shares by a fraction, the numerator of which is
twelve (12) minus the number of full months of service that the Optionee
completed during the calendar year in which occurs the Grant Date and the
denominator of which is twelve (12). If the foregoing calculation
results in vesting of a factional Optioned Share, the number of Optioned Shares
that become vested will be rounded to the next higher whole number of
shares. The number of Optioned Shares available for exercise on or
after each vesting date will be reduced by a pro rata portion of the total
number of forfeited Optioned Shares.
Notwithstanding
the
vesting schedule described above, the Committee may extend the date(s) of
vesting to a later date to take into account any period of the Optionee’s leave
of absence, unless prohibited by law.
3. Exercise
of
Option. The Option, to the extent vested in accordance with
Paragraph 2, may be exercised during the period beginning on the vesting
date and ending on the earlier of:
|
a.
|
on
the first
anniversary of the date the Optionee’s employment with the Company and its
Affiliates terminates for any reason other than Retirement, death
or
disability (as determined by the Committee based on the definition
set
forth in the Company’s long-term disability plan);
or
|
|
b.
|
in
any other
case, February 14, 2018.
|
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During
the life of
the Optionee, this Option may be exercised only by the Optionee (or if the
Optionee is incapacitated, by the Optionee’s legal
representative). If the Optionee dies before exercising all of the
vested Option, the executor of the Optionee’s estate (or by such person as the
executor of the estate certifies as inheriting the Option as a result of the
operation of the Optionee’s last will and testament or as a result of the laws
of interstate succession) may exercise all or any portion of the vested Option
that has not been exercised, during the exercise periods described above.
4. Change
in
Control. Upon the occurrence of a Change of Control (as
defined in the Plan), the Option, to the extent then outstanding and
unexercised, will become fully vested (if not previously vested) but shall
otherwise be subject to the terms of the Plan with respect to such Change in
Control.
5. Manner
of Exercise and
Payment. In order to exercise this Option, the Optionee (or
such other person entitled to exercise the Option as provided in Paragraph
3)
must provide a written notice to the Company stating that the Optionee would
like to exercise all or a portion of the Option and specifying the number of
vested Optioned Shares which are being purchased. The exercise notice
must be delivered (in person or by mail or by facsimile) to the Secretary of
the
Company.
The
written notice
must be, in the case of clauses (a), (b) and (c) below, accompanied by payment
equal to the number of Optioned Shares being purchased multiplied by the option
price or, in the case of clause (d) below, accompanied by the documents
specified in such clause (d), which will result in payment to the Company on
the
settlement date (i.e., T+3) equal to the number of Optioned Shares being
purchased multiplied by the option price. Subject to such rules and
restrictions as the Committee may prescribe, payment may be made, at the
Optionee’s election: (a) in cash or by certified check payable to the
Company; (b) by delivering previously acquired shares of Common Stock, duly
endorsed in blank or accompanied by stock powers duly endorsed in blank, with
a
fair market value at the time of exercise, as determined by the Committee,
equal
to the required payment amount; (c) by any combination of (a) and (b); or (d)
by
delivering to the Company or its designated agent an executed irrevocable option
exercise form together with irrevocable instructions to a broker-dealer to
sell
or margin a sufficient portion of the Optioned Shares to be exercised and to
deliver the sale or margin proceeds directly to the Company to pay the option
price.
Option
exercise
notices postmarked (if mailed) or received by the Secretary of the Company
(if
by facsimile or hand-delivery) prior to 11:59 p.m. (central time) of the date
specified in Paragraph 3 shall be given effect. Any notice postmarked
or received after such time shall be null and void.
6. Tax
Withholding. Upon exercise of all or any part of the Option,
the Company may satisfy its withholding obligations in any manner determined
by
the Committee, including by withholding a portion of the Optionee’s compensation
or, in the case of a “cashless” exercise, by withholding a number of the
Optioned Shares being purchased that have a fair market value, as determined
by
the Committee, equal to the amount required to be withheld. The fair
market
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value
of fractional
shares of Stock remaining after the withholding requirements are satisfied
will
be paid to the Optionee in cash. The Company may also require the
Optionee to deliver a check for the Company’s withholding tax obligation prior
to effecting the exercise of the option or delivering the shares issuable upon
exercise.
7. Miscellaneous.
(a) The
Optionee (or
his legal representative) shall not be deemed to be a shareholder of the Company
with respect to any of the Optioned Shares being purchased until such shares
are
paid for in full, and the Company’s withholding tax liability is satisfied, to
the Committee’s satisfaction.
(b) The
Option shall
not be transferable by the Optionee; provided that, following the Optionee’s
death, the Option, to the extent exercisable in accordance with the
terms of the Plan and this Agreement, may be exercised by the executor of the
Optionee’s estate (or by such person as the executor of the estate certifies as
inheriting the Option as a result of the operation of the Optionee’s last will
and testament or as a result of the laws of intestate succession).
(c) It
is fully
understood that nothing contained in this Agreement or the Plan shall interfere
with or limit in any way the right of the Company or any Affiliate to terminate
the Optionee’s employment at any time nor confer upon the Optionee any right to
continue in the employ of the Company or any Affiliate.
(d) As
a condition of
the granting of this Option, the Optionee agrees, for himself, his legal
representatives, the executor of his estate, and his heirs, that the Plan and
this Agreement shall be subject to discretionary interpretation by the Committee
and that any interpretation by the Committee of the terms of the Plan and this
Agreement shall be final, binding and conclusive on the Optionee, his legal
representatives, the executor of his estate and his heirs. The
Optionee, his legal representatives, the executor of his estate and his heirs
shall not challenge or dispute the Committee’s decisions.
(e) The
Committee may
modify this Option at any time. However, no modification, extension
or renewal shall (i) confer on the Optionee any right or benefit which he would
not be entitled to if a new option was granted under the Plan at such time
or
(ii) alter, impair or adversely affect this Option or the Agreement without
the
written consent of the Optionee; provided that the Committee need not obtain
written consent of the Optionee for a modification of the Option to the extent
that the Plan specifically permits the Committee action or to the extent that
the Committee deems such modification necessary to comply with any applicable
law, the listing requirements of any principal securities exchange or market
on
which the shares underlying the Option are then traded, or to preserve favorable
accounting or tax treatment of the Option for the Company.
(f) No
individual may
exercise the Option and no shares will be issued under this Agreement unless
and
until the Company has determined to its satisfaction that such
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exercise
and
issuance comply with all relevant provisions of applicable law, including the
requirements of any stock exchange on which the shares may then be
traded.
8. Governing
Law. This Agreement shall be governed by the internal laws of
the State of Illinois, without regard to the principle of conflict of laws,
as
to all matters, including, but not limited to, matters of validity,
construction, effect, performance and remedies. No legal action or
proceeding may be brought with respect to this Agreement more than one year
after the later of (a) the last date on which the act or omission giving rise
to
the legal action or proceeding occurred; or (b) the date on which the individual
bringing such legal action or proceeding had knowledge (or reasonably should
have had knowledge) of such act or omission. Any such action or
proceeding must be commenced and prosecuted in its entirety in the federal
or
state court having jurisdiction over Xxxxx County, Wisconsin or Xxxx County,
Illinois, and each individual with any interest hereunder agrees to submit
to
the personal jurisdiction thereof, and agrees not to raise the objection that
such courts are not a convenient forum. Such action or other legal
proceeding shall be heard pursuant to a bench trial and, the parties to such
proceeding shall waive their rights to a trial by jury.
9. Severability. In
the event any provision of the Agreement is held illegal or invalid for any
reason, the illegality or invalidity will not affect the remaining provisions
of
the Agreement, and the Agreement shall be construed and enforced as if the
illegal or invalid provision had not been included.
10. Terms
of Plan
Govern. All parties acknowledge that this option is granted
under and pursuant to the Plan, which shall govern all rights, interests,
obligations and undertakings of both the Company and the
Participant.
By: ___________________________________
Title: Senior
VP & Chief HR Officer
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ACKNOWLEDGEMENT
FORM
I
have read the
terms of the Integrys Energy group, Inc. Nonqualified Stock Option Agreement,
dated February 14, 2008, and I hereby declare that I understand and agree to
be
bound by the terms and conditions of the Agreement.
_____________________________________________
Optionee
Print
name:____________________________________
PLEASE
DETACH THIS
ACKNOWLEDGEMENT FORM FROM THE OPTION AGREEMENT AND RETURN IT TO THE GREEN BAY
HUMAN RESOURCES DEPARTMENT. YOUR OPTION WILL NOT BECOME EFFECTIVE
UNTIL THE COMPANY RECEIVES THIS ACKNOWLEDGMENT FORM.
