TUCSON ELECTRIC POWER COMPANY
RESTRICTED STOCK AWARD AGREEMENT
THIS RESTRICTED STOCK AWARD AGREEMENT (this "Agreement")
is dated as of the ____ day of __________, 1997, between TUCSON
ELECTRIC POWER COMPANY, an Arizona corporation (the "Company"), and
_________________________ (the "Employee").
W I T N E S S E T H
WHEREAS, the Company has adopted and the shareholders of
the Company have approved the Tucson Electric Power Company 1994
Stock and Incentive Plan (the "Plan"); and
WHEREAS, the Compensation Committee of the Board of
Directors (the "Committee") has granted to the Employee as of the
date first written above (the "Award Date") a restricted stock
award ("Restricted Stock Award") under the Plan, upon the terms and
conditions set forth herein; and
WHEREAS, the Company has not yet determined whether the
Restricted Stock Award will be satisfied through the issuance of
new shares of its common stock, no par value ("Common Stock"), or
shares of Common Stock that it acquires on the open market; and
WHEREAS, the Company and the Employee desire to evidence
the Committee's grant of the Restricted Stock Award and provide
that the Committee will, subject to the restrictions described
below, transfer shares of its Common Stock to Employee upon the
terms and conditions described herein as soon as practical
following the Company's determination as to the source of such
shares;
NOW, THEREFORE, in consideration of the services rendered
and to be rendered by the Employee, and the mutual promises made
herein and the mutual benefits to be derived therefrom, the parties
agree to the terms and conditions set forth herein (including the
terms and conditions incorporated by reference from the Plan).
1. DEFINED TERMS. Capitalized terms not otherwise
defined herein shall have the meaning assigned to such terms in the
Plan.
2. AWARD OF RESTRICTED STOCK. Subject to the terms of
this Agreement, the Company grants to the Employee a Restricted
Stock Award with respect to an aggregate of ____________ shares of
Common Stock (the "Restricted Stock") as of the Award Date. The
Company will transfer such shares of Restricted Stock to Employee
after it has determined the source of such shares.
3. OWNERSHIP RIGHTS OF RESTRICTED STOCK.
(a) Restrictions on Transfer. Prior to the time they
become vested, neither the shares of Restricted Stock comprising
the Restricted Stock Award nor any interest therein, amount payable
in respect thereof, nor Restricted Property (as defined in Section
7) subject thereto, may be sold, assigned, transferred, pledged or
otherwise disposed of, alienated or encumbered, either voluntarily
or involuntarily, other than by will or the laws of descent and
distribution.
(b) Dividends; Voting Rights. Subject to the terms of
this Agreement, during the Restricted Period (as defined in Section
4), the Employee shall have, with respect to the Restricted Stock,
all rights of a shareholder of the Company, including the right to
vote such shares and the right to receive all regular cash
dividends, if any, paid with respect to the shares of Restricted
Stock; provided, that such voting and dividend rights shall
terminate immediately with respect to any shares of Restricted
Stock upon forfeiture of those shares pursuant to Section 5 of this
Agreement.
(c) Certificates. Subject to the requirements of
Section 8, the Company shall issue a certificate or certificates
for the shares of Restricted Stock subject to the Restricted Stock
Award, registered in the name of the Employee, which certificate(s)
shall, upon redelivery thereof to the Company pursuant to
subsection (d) below, be held by the Company until the restrictions
on such shares shall have lapsed and the shares shall thereby have
become vested or the shares represented thereby are forfeited
hereunder. The certificate(s) representing shares forfeited
hereunder and any shares accumulated thereon shall be cancelled;
any other rights or property (including Restricted Property)
accumulated in respect thereof shall also be forfeited and shall
revert to the Company. The share certificate(s) representing
Restricted Stock shall bear a legend referring to this Agreement
and restrictions and limitations on such shares.
(d) Certificates to be Held by Company; Power of
Attorney. Upon delivery to the Employee of the certificate(s)
representing shares of Restricted Stock awarded to the Employee,
the Employee shall redeliver such certificate(s) to the Company,
together with a stock power or stock powers, in blank, with respect
to such certificate(s), to be held by the Company pursuant to the
terms hereof. The Employee hereby appoints the Company and each of
its authorized representatives as the Employee's attorney(s)-in-
fact to effect any transfer of unvested forfeited shares (or shares
otherwise reacquired by the Company hereunder) or related cash,
property or rights (including Restricted Property) to the Company
as may be required pursuant to the Plan and this Agreement and to
execute such documents as the Company or such representatives deem
necessary or advisable in connection with any such transfer.
(e) Delivery of Certificates. Subject to the
requirements of Section 8, promptly after the lapse or other
release of restrictions in accordance with the terms hereof, a
certificate or certificates evidencing the number of shares of
Common Stock as to which the restrictions have lapsed or been
released or such lesser number as may be permitted pursuant to
Section 9 shall be delivered to the Employee or other person
entitled under the Plan to receive the shares. The Employee or
such other person shall deliver to the Company any representations
or other documents or assurances required pursuant to Section 8.
The shares so delivered shall no longer be Restricted Stock or
restricted shares hereunder or under the Plan.
(f) Return of Shares. Upon the occurrence of any for-
feiture of shares of Restricted Stock hereunder, such unvested,
forfeited shares shall, without payment of any consideration by the
Company for such transfer, be automatically transferred to the
Company, without any other action by the Employee, or the
Employee's Beneficiary or Personal Representative, as the case may
be. The Company may exercise its powers under Section 3(d) and
take any other action necessary or advisable to evidence such
transfer. The Employee, or the Employee's Beneficiary or Personal
Representative, as the case may be, shall deliver any additional
documents of transfer that the Company may request to confirm the
transfer of such unvested, forfeited shares to the Company.
(g) Delivery of Shares. Vested shares and any other
amounts deliverable pursuant to this Award shall be delivered and
paid only to the Employee or the Employee's Beneficiary or Personal
Representative, as the case may be.
4. LAPSE OF RESTRICTIONS. The shares of Restricted
Stock awarded to the Employee pursuant to Section 2 hereof and any
additional Restricted Property shall be subject to the restrictions
set forth in Section 3(a) during the Restricted Period (as defined
below). The "Restricted Period" shall commence as of the Award
Date and shall terminate as follows:
Date Shares Become Percentage of Shares
Free From Restrictions Free From Restrictions
First anniversary 33-1/3%
of Award Date
Second anniversary 33-1/3%
of Award Date
Third anniversary 33-1/3%
of Award Date
5. TERMINATION OF EMPLOYMENT.
(a) In the event that Employee terminates employment
with the Company for any reason other than those set forth in
subsections 5(b) and 5(c) during the Restricted Period, then any
shares of Restricted Stock which are still subject to any
restrictions set forth above shall upon such termination of
employment automatically be forfeited and returned to the Company;
provided, however, that in the event of an involuntary termination
of Employee's employment, the Committee may, in its sole
discretion, waive the automatic forfeiture of any or all shares of
Restricted Stock and may add such new restrictions as it deems
appropriate.
(b) In the event that Employee attains normal retirement
age under the Company's Salaried Employees Retirement Plan or the
Pension Trust Plan for Employees of Tucson Electric Power Company
represented by IBEW Local 1116, the Restricted Period applicable to
the Restricted Stock pursuant to Section 4 hereof shall
automatically terminate and, except as otherwise provided in
Section 8, the shares of Restricted Stock shall thereby be free of
restrictions and freely transferable. In the event that the
Employee terminates employment with the Company because of Early
Retirement under the Salaried Employees Pension Plan, any shares of
Restricted Stock still subject to restrictions shall be forfeited
and returned to the Company; provided, however, that the Committee
in its sole discretion may waive the restrictions remaining on any
or all shares of Restricted Stock or add such new restrictions to
those shares of Restricted Stock as it deems appropriate.
(c) If the employment of the Employee terminates by
reason of death or Disability, the restrictions applicable to the
shares of Restricted Stock pursuant to Section 4 shall terminate
automatically with respect to that number of shares (rounded to the
nearest whole number) equal to the number of shares of Restricted
Stock granted to such Participant multiplied by the number of full
months which have elapsed since the date of grant divided by the
maximum number of full months of the Restricted Period. All
remaining shares still subject to restrictions shall be forfeited
and returned to the Company; provided, however, that the Committee
in its sole discretion, may waive the restrictions remaining on any
or all such remaining shares. The Calculated Portion (as defined
below) of all shares of Restricted Stock, which are then subject to
any restrictions set forth above, shall automatically be made free
from restrictions. The remaining shares of Restricted Stock shall
be forfeited and returned to the Company except to the extent such
shares shall be made free from restrictions by the Committee. The
"Calculated Portion" shall mean the number of shares (rounded to
the nearest whole number) equal to the number of shares of
Restricted Stock granted, multiplied by the number of full months
which have elapsed since the Award Date, divided by the maximum
number of full months remaining in the Restricted Period.
6. CONTINUANCE OF EMPLOYMENT. Notwithstanding any
commitment of the Employee to remain in the employ of the Company,
the grant of this Award shall not confer upon the Employee any
right with respect to the continuation of his or her employment by
the Company or any Subsidiary or alter or interfere in any way with
the right of the Company or of any Subsidiary at any time to
terminate such employment or to change the compensation of the
Employee or other terms of his or her employment; and neither shall
these terms alter or in any way affect the rights of the Company or
the Employee under any other written employment agreement between
them, except as expressly provided herein.
7. ADJUSTMENTS UPON SPECIFIED EVENTS. Upon the
occurrence of certain events relating to the Company's stock
contemplated by Section 5.3 of the Plan, the Committee shall make
adjustments if appropriate in the number and kind of securities
that may become vested under this Award. If any adjustment shall
be made under Section 5.3 or 9.5 of the Plan pursuant to an event
described therein and the shares of Restricted Stock are not fully
vested upon such event or prior thereto, the restrictions
applicable to such shares of Restricted Stock shall continue in
effect with respect to any consideration or other securities (the
"Restricted Property"), received in respect of such Restricted
Stock. Such Restricted Property shall vest at such times and in
such proportion as the shares of Restricted Stock to which the
Restricted Property is attributable vest, or would have vested
pursuant to the terms hereof if such shares of Restricted Stock had
remained outstanding.
8. COMPLIANCE; APPLICATION OF SECURITIES LAWS.
Notwithstanding anything else contained herein to the contrary, no
shares of Common Stock shall be delivered and (subsequent to
vesting) no shares shall be offered for sale by the Employee unless
and until (i) the Company has received ACC approval to issue the
shares and (ii) any then applicable requirements of the Securities
and Exchange Commission (the "Commission") or any other regulatory
agency having jurisdiction and any exchanges upon which the Common
Stock may be listed shall have been fully satisfied. Upon the
Company's request, the Employee, or any other person entitled to
such shares of Common Stock pursuant to this Award, shall provide
a written assurance of compliance (or representations reasonably
requested by the Company to assure such compliance) satisfactory to
the Company.
9. WITHHOLDING TAX. The Employee agrees that, in the
event the award of the Restricted Stock or the expiration of
restrictions thereon results in the Employee's realization of
income which for federal, state or local income tax purposes is, in
the opinion of counsel for the Company, subject to withholding of
tax at source by the Company, the Employee will pay to the Company
an amount equal to such withholding tax (or the Company may
withhold such amount from the Employee's salary or from dividends
deposited with the Company with respect to the Restricted Stock).
To the extent permissible under tax, securities and other
laws, the Company may, in its sole discretion, allow the Employee
to satisfy a tax withholding requirement (i) by using already owned
(and fully vested) shares; (ii) through a cashless transaction; or
(iii) by directing the Company to apply shares of stock to which
the Employee is entitled as a result of the lapse of the
Restriction Period.
10. INVESTMENT REPRESENTATIONS. The Employee represents
and agrees that if the Restricted Stock is awarded at a time when
there is not in effect under the Securities Act of 1933 (the
"Securities Act") a registration statement relating to the Common
Stock and there is not available for delivery a prospectus meeting
the requirements of Section 10(a)(3) of the Securities Act, (i) the
Employee will acquire the shares upon such award for the purpose of
investment and not with a view to their resale or distribution,
(ii) that upon such award, the Employee will furnish to the Company
an investment letter in form and substance satisfactory to the
Company, (iii) prior to selling or offering for sale any shares of
Common Stock, the Employee will furnish the Company with an opinion
of counsel satisfactory to it to the effect that such sale may
lawfully be made and will furnish it with such certificates as to
factual matters as it may reasonably request, and (iv) that
certificates representing shares of Common Stock may be marked with
an appropriate legend describing such conditions precedent to sale
or transfer.
11. LAWS APPLICABLE TO CONSTRUCTION. The
interpretation, performance and enforcement of the Award and this
Agreement shall be governed by the laws of the State of Arizona.
12. ACCELERATION. In the event of a change in control,
as described in Section 14.2 of the Plan, the Restricted Stock
shall immediately vest free of restrictions.
13. NOTICES. Any notice to be given to the Company
under the terms of this Agreement shall be in writing and addressed
to the Company at its principal office located at 000 Xxxx Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxx 00000, Attention: Corporate Secretary, and
any notice to be given to the Employee shall be addressed to him or
her at the address given beneath the Employee's signature hereto,
or at such other address as either party may hereafter designate in
writing to the other party.
14. AMENDMENT. This Agreement may only be amended in
writing by an instrument signed by both parties.
15. GENERAL TERMS. The award of Restricted Stock and
this Agreement are subject to, and the Company and the Employee
agree to be bound by, the provisions of the Plan that apply to the
Restricted Stock or Restricted Stock awards. Such provisions are
incorporated herein by this reference. The Employee acknowledges
receiving a copy of the Plan and reading its applicable provisions.
Provisions of the Plan that grant discretionary authority to the
Committee shall not create any rights in the Employee, unless such
rights are expressly set forth herein.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date and year first written above.
TUCSON ELECTRIC POWER COMPANY,
an Arizona corporation
By: ___________________________________
Name: _________________________________
Title: ________________________________
EMPLOYEE
__________________________________
(Signature)
__________________________________
(Print Name)
__________________________________
(Address)
__________________________________
(City, State, Zip Code)
__________________________________
(Social Security Number)
CONSENT OF SPOUSE
In consideration of the execution of the foregoing
Restricted Stock Award Agreement by the Company, I,
_________________, the spouse of the Employee herein named, do
hereby join with my spouse in executing the foregoing Restricted
Stock Award Agreement and do hereby agree to be bound by all of the
terms and provisions thereof and of the Plan.
DATED: _______________, 19__. __________________________
Signature of Spouse
