Exhibit 10.6
TECO ENERGY, INC.
1996 EQUITY INCENTIVE PLAN
Performance Shares Agreement
TECO Energy, Inc. (the Company ) and _______________ (the
Grantee ) have entered into this Performance Shares Agreement (the
Agreement ) dated April 21, 1999 under the Company s 1996 Equity
Incentive Plan (the Plan ). Capitalized terms not otherwise defined
herein have the meanings given to them in the Plan.
1. Grant of Performance Shares. Pursuant to the Plan and
subject to the terms and conditions set forth in this Agreement, the
C o m p a ny hereby grants, issues and delivers to the Grantee
_____________ shares ( Number of Restricted Performance Shares ) of
its Common Stock (the Restricted Performance Shares ) as of the date
of this Agreement and will grant, issue and deliver to the Grantee the
Performance Reward Percentage of _____________ shares ( Number of
Additional Performance Shares ) of its Common Stock (the Additional
Performance Shares ) no later than 30 days after the end of the
Performance Period.
The Performance Period is the period beginning April 1, 1999
and ending on the date determined under Section 3.
Total Shareholder Return is the amount obtained by dividing (1)
the sum of (a) the amount of dividends with respect to the Performance
Period, assuming dividend reinvestment, and (b) the difference between
the share price at the end and beginning of the Performance Period, by
(2) the share price at the beginning of the Performance Period, with
the share price in each case being determined by using the average
closing price during the 20 trading days preceding the date of
determination.
The Performance Increment is the Total Shareholder Return with
respect to the Company s Common Stock minus the Total Shareholder
Return with respect to the Dow Xxxxx US Electrical Utilities Index-All
Regions (ELC).
The Performance Reward Percentage is the percentage shown in
column B for Restricted Performance Shares and in column C for
A d ditional Performance Shares corresponding to the Performance
Increment in column A, with interpolation of the percentages in
columns B and C in proportion to the corresponding percentage points
in column A for whole percentage Performance Increments of more than 0
but less than 30; provided that if the Performance Period ends less
than three years after it began, the respective Performance Reward
P e r c entages for Restricted Performance Shares and Additional
Performance Shares will be prorated based on the portion of three
years from the beginning of the Performance Period that has elapsed by
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t h e end of the Performance Period, and before proration the
Performance Reward Percentage for Restricted Performance Shares will
be 100%.
A B C
Performance Performance Performance Reward
Increment Reward Percentage for
Percentage for Additional
Restricted Performance Shares
Performance
Shares
0 50% 0%
15 percentage points 100% 0%
25 percentage points 100% 50%
30 or more 100% 100%
percentage points
2. Restrictions on Restricted Performance Shares. Until the
restrictions terminate under Section 3, unless otherwise determined by
the Committee:
(a) the Restricted Performance Shares may not be sold,
assigned, pledged or transferred by the Grantee; and
(b) all Restricted Performance Shares will be forfeited and
returned to the Company if the Grantee ceases to be an employee of the
Company or any business entity in which the Company owns directly or
indirectly 50% or more of the total voting power or has a significant
financial interest as determined by the Committee (an Affiliate ).
3. End of Performance Period and Termination of Restrictions.
The Performance Period will end, the restrictions on the Performance
Reward Percentage of the Number of Restricted Performance Shares will
terminate, the remainder of the Restricted Performance Shares will be
forfeited and returned to the Company, and the Grantee will cease to
have any right to receive any Additional Performance Shares in excess
of the Performance Reward Percentage of the Number of Additional
Performance Shares, on the earliest to occur of the following events:
(a) the Grantee s death;
(b) the termination of Grantee s employment with the
Company or any Affiliate because of a disability that would entitle
the Grantee to benefits under the long-term disability benefits
program of the Company for which the Grantee is eligible, as
determined by the Committee;
(c) the termination by the Company or any Affiliate of
Grantee s employment other than for Cause as determined by the
Committee. Cause means (i) willful and continued failure of the
Grantee to substantially perform his duties with the Company or such
Affiliate (other than by reason of physical or mental illness) after
written demand specifically identifying such failure is given to the
Grantee by the Company, or (ii) willful conduct by the Grantee that is
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demonstrably and materially injurious to the Company. For purposes of
this subsection, willful conduct requires an act, or failure to act,
that is not in good faith and that is without reasonable belief that
the action or omission was in the best interest of the Company or the
Affiliate;
(d) the Grantee s retirement from the Company or an
Affiliate at or after attainment of the age at which benefits are
payable under the TECO Energy Group Retirement Plan or any successor
thereto without reduction for commencement of benefits before normal
retirement age, or any earlier date that the Committee determines will
constitute a normal retirement for purposes of this Agreement;
(e) upon a Change in Control. For purposes of this
Agreement, a Change in Control means a change in control of the
Company of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the Exchange Act ),
whether or not the Company is in fact required to comply therewith;
provided, that, without limitation, such a Change in Control shall be
deemed to have occurred if:
(1) any person (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than the Company, any
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or
indirectly, by the shareholders of the Company in substantially
the same proportions as their ownership of stock of the Company
is or becomes the beneficial owner (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of
the Company representing 30% or more of the combined voting power
of the Company s then outstanding securities;
(2) during any period of twenty-four (24) consecutive
months (not including any period prior to the date of this
Agreement), individuals who at the beginning of such period
constitute the Board of Directors of the Company and any new
director (other than a director designated by a person who has
e n tered into an agreement with the Company to effect a
transaction described in subsections (1), (3) or (4) of this
Section 3(e)) whose election by the Board of Directors of the
Company or nomination for election by the shareholders of the
Company was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof;
(3) there is consummated a merger or consolidation of
the Company or any direct or indirect subsidiary of the Company
w i th any other corporation, other than (i) a merger or
consolidation resulting in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least 65% of the
combined voting securities of the Company or such surviving
entity or any parent thereof outstanding immediately after such
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merger or consolidation or (ii) a merger or consolidation
effected to implement a recapitalization of the Company (or
similar transaction) in which no person (as hereinabove
defined) acquires 30% or more of the combined voting power of the
Company s then outstanding securities; or
(4) the shareholders of the Company approve a plan of
complete liquidation of the Company or there is consummated the
sale or disposition by the Company of all or substantially all of
the Company s assets; or
(f) March 31, 2002.
4. Rights as Shareholder. Subject to the restrictions and
other limitations and conditions provided in this Agreement, the
Grantee as owner of the Restricted Performance Shares will have all
the rights of a shareholder, including but not limited to the right to
receive all dividends paid on, and the right to vote, the Restricted
Performance Shares.
5. Stock Certificates. Each certificate issued for shares of
Restricted Performance Shares will be registered in the name of the
Grantee and deposited by the Grantee, together with a stock power
endorsed in blank, with the Company and will bear a legend in
substantially the following form:
THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF
S T O CK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS,
CONDITIONS AND RESTRICTIONS (INCLUDING RESTRICTIONS ON
T R A NSFER AND FORFEITURE PROVISIONS) CONTAINED IN AN
AGREEMENT BETWEEN THE REGISTERED OWNER AND TECO ENERGY, INC.
A COPY OF SUCH AGREEMENT WILL BE FURNISHED TO THE HOLDER OF
THIS CERTIFICATE UPON WRITTEN REQUEST AND WITHOUT CHARGE.
Upon the termination of the restrictions imposed under this
Agreement as to any shares of Restricted Performance Shares deposited
with the Company hereunder under conditions that do not result in the
forfeiture of those shares, the Company will return to the Grantee (or
t o such Grantee s legal representative, beneficiary or heir)
certificates, without such legend, for such shares.
6. Adjustment of Terms. In the event of corporate transactions
affecting the Company s outstanding Common Stock, the Committee will
equitably adjust the number and kind of Additional Performance Shares
subject to this Agreement to the extent provided by the Plan.
7. Notice of Election Under Section 83(b). If the Grantee
makes an election under Section 83(b) of the Internal Revenue Code of
1986, as amended, with respect to Restricted Performance Shares, he or
she will provide a copy thereof to the Company within 30 days of the
filing of such election with the Internal Revenue Service.
8. Withholding Taxes. The Grantee will pay to the Company, or
make provision satisfactory to the Committee for payment of, any taxes
required by law to be withheld in respect of the Restricted
Performance Shares and Additional Performance Shares no later than the
date of the event creating the tax liability. In the Committee s
discretion, such tax obligations may be paid in whole or in part in
shares of Common Stock, including the Restricted Performance Shares
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and the Additional Performance Shares, valued at fair market value on
the date of delivery. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the Grantee.
9. The Committee. Any determination by the Committee under, or
interpretation of the terms of, this Agreement or the Plan will be
final and binding on the Grantee.
10. Limitation of Rights. The Grantee will have no right to
continued employment by virtue of this Agreement.
11. Amendment. The Company may amend, modify or terminate this
Agreement, including substituting another Award of the same or a
different type and changing the date of realization, provided that the
Grantee s consent to such action will be required unless the action,
taking into account any related action, would not adversely affect the
Grantee.
12. Governing Law. This Agreement will be governed by and
interpreted in accordance with the laws of Florida.
TECO ENERGY, INC.
By: ___________________________
X. X. Xxxx
Vice President-Human Resources
___________________________
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