1
Exhibit (10)-5
WISCONSIN ENERGY CORPORATION
INCENTIVE STOCK OPTION
----------------------
THIS INCENTIVE STOCK OPTION, dated the ____ day of ________ 199_, is
granted by WISCONSIN ENERGY CORPORATION (the "Company"), to ___________ (the
"Employee") pursuant to the Company's 1993 Omnibus Stock Incentive Program
(the "Plan").
WHEREAS, the Company believes it to be in the best interests of the
Company, its subsidiaries and its stockholders for its officers and other key
employees to obtain or increase their stock ownership interest in the Company
in order that they will thus have a greater incentive to work for and manage
the Company's affairs in such a way that its shares may become more valuable;
and
WHEREAS, the Employee is employed by the Company or one of its
subsidiaries as an officer or key employee;
NOW, THEREFORE, in consideration of the premises and of the services to
be performed by the Employee, the Company hereby grants this stock option to
the Employee on the terms and conditions hereinafter expressed.
1. OPTION GRANT
------------
The Company hereby grants to the Employee an option to purchase a total
of ______ shares of Common Stock of the Company at an option price of $_______
per share, being not less than 100% of the fair market value of the stock on
the date hereof. This option is intended to qualify as an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended.
2
2. TIME OF EXERCISE
----------------
This option may be exercised (in the manner described in paragraph 3
hereof) in whole or in part, at any time and from time to time, subject to the
following limitations:
(a) This option may not be exercised to any extent until
_________________, at which time it will become fully exercisable. However,
in the event that the Employee's employment with the Company or a subsidiary
terminates by reason of retirement, permanent total disability or death prior
to _________________, then this option shall become fully exercisable upon
such termination. In addition, this option shall become fully exercisable
upon a Change of Control of the Company as defined in paragraph 11 of the
Plan.
(b) This option may not be exercised:
(i) more than three months after the termination of the
Employee's employment with the Company or a subsidiary
for any reason other than retirement, permanent total
disability or death; or
(ii) more than twelve months after termination of
employment by reason of permanent total disability or
death; or
(iii) more than three years after termination of employment
by retirement; or
(iv) more than ten years from the date hereof.
For these purposes retirement and permanent total disability shall
be determined in accordance with the established policies of the
Company applicable to officers and other key employees.
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3. METHOD OF EXERCISE
------------------
This option may be exercised only by appropriate notice in writing delivered
to the Secretary of the Company and accompanied by:
(a) a check payable to the order of the Company for the full
purchase price of the shares purchased, and
(b) such other documents or representations as the Company may
reasonably request in order to comply with securities, tax
or other laws then applicable to the exercise of the option.
Payment of the purchase price may be made in whole or in part by the delivery
of shares of Common Stock owned by the Employee (or by certification of the
Employee's ownership of such shares), valued at fair market value on the date
of exercise. 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.
4. NON-TRANSFERABILITY; DEATH
--------------------------
This option is not transferable by the Employee otherwise than by
will or the laws of descent and distribution and is exercisable during the
Employee's lifetime only by the Employee. If the Employee dies during the
option period, this option may be exercised in whole or in part and from time
to time, in the manner described in paragraph 3 hereof, 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) twelve months after the
Employee's death or (b) ten years from the date hereof, whichever period is
shorter.
5. 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
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4
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.
6. 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 Company 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.
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5
IN WITNESS WHEREOF, the Company has caused the execution hereof by
its duly authorized officer and Employee has agreed to the terms and
conditions of this option, all as of the date first above written.
WISCONSIN ENERGY CORPORATION
By _____________________________________
Chairman
_____________________________________
Employee
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WISCONSIN ENERGY CORPORATION
NON-QUALIFIED STOCK OPTION
--------------------------
THIS NON-QUALIFIED STOCK OPTION, dated the ____ day of __________
199_, is granted by WISCONSIN ENERGY CORPORATION (the "Company"), to
________________ (the "Employee") pursuant to the Company's 1993 Omnibus Stock
Incentive Program (the "Plan").
WHEREAS, the Company believes it to be in the best interests of
the Company, its subsidiaries and its stockholders for its officers and other
key employees to obtain or increase their stock ownership interest in the
Company in order that they will thus have a greater incentive to work for and
manage the Company's affairs in such a way that its shares may become more
valuable; and
WHEREAS, the Employee is employed by the Company or one of its
subsidiaries as an officer or key employee;
NOW, THEREFORE, in consideration of the premises and of the
services to be performed by the Employee, the Company hereby grants this stock
option to the Employee on the terms and conditions hereinafter expressed.
1. OPTION GRANT
------------
The Company hereby grants to the Employee an option to purchase a
total of ______ shares of Common Stock of the Company at an option price of
$_____ per share, being not less than 100% of the fair market value of the
stock on the date hereof. This option is not intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
7
2. TIME OF EXERCISE
----------------
This option may be exercised (in the manner described in paragraph
3 hereof) in whole or in part, at any time and from time to time, subject to
the following limitations:
(a) This option may not be exercised to any extent until
_________________, at which time it will become fully exercisable. However,
in the event that the Employee's employment with the Company or a subsidiary
terminates by reason of retirement, permanent total disability or death prior
to _________________, then this option shall become fully exercisable upon
such termination. In addition, this option shall become fully exercisable
upon a Change of Control of the Company as defined in paragraph 11 of the
Plan.
(b) This option may not be exercised:
(i) more than three months after the termination of the
Employee's employment with the Company or a subsidiary
for any reason other than retirement, permanent total
disability or death; or
(ii) more than twelve months after termination of
employment by reason of permanent total disability or
death; or
(iii) more than three years after termination of employment
by retirement; or
(iv) more than ten years from the date hereof.
For these purposes retirement and permanent total disability shall
be determined in accordance with the established policies of the
Company applicable to officers and other key employees.
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8
3. METHOD OF EXERCISE
------------------
This option may be exercised only by appropriate notice in writing
delivered to the Secretary of the Company and accompanied by:
(a) a check payable to the order of the Company for the
full purchase price of the shares purchased and any
required tax withholding, and
(b) such other documents or representations as the Company
may reasonably request in order to comply with
securities, tax or other laws then applicable to the
exercise of the option.
Payment of the purchase price may be made in whole or in part by the delivery
of shares of Common Stock owned by the Employee (or by certification of the
Employee's ownership of such shares), valued at fair market value on the date
of exercise. 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.
The Employee may satisfy any tax withholding obligation in whole or in part by
electing to have the Company retain option shares having a fair market value
on the date of exercise equal to the amount required to be withheld.
4. NON-TRANSFERABILITY; DEATH
--------------------------
This option is not transferable by the Employee otherwise than by
will or the laws of descent and distribution and is exercisable during the
Employee's lifetime only by the Employee. If the Employee dies during the
option period, this option may be exercised in whole or in part and from time
to time, in the manner described in paragraph 3 hereof, 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) twelve months after the
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9
Employee's death or (b) ten years from the date hereof, whichever period is
shorter.
5. 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.
6. 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
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10
Consideration"), whether as a result of reorganization, sale, merger,
consolidation, or other similar transaction, the Company 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.
IN WITNESS WHEREOF, the Company has caused the execution hereof by
its duly authorized officer and Employee has agreed to the terms and
conditions of this option, all as of the date first above written.
WISCONSIN ENERGY CORPORATION
By_________________________________
Chairman
_________________________________
Employee
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WISCONSIN ENERGY CORPORATION
INCENTIVE STOCK OPTION AND CONTINGENT DIVIDEND AWARD
----------------------------------------------------
THIS INCENTIVE STOCK OPTION, dated the 20th day of December 1995,
is granted by WISCONSIN ENERGY CORPORATION (the "Company"), to ___________
(the "Employee") pursuant to the Company's 1993 Omnibus Stock Incentive
Program (the "Plan").
WHEREAS, the Company believes it to be in the best interests of
the Company, its subsidiaries and its stockholders for its officers and other
key employees to obtain or increase their stock ownership interest in the
Company in order that they will thus have a greater incentive to work for and
manage the Company's affairs in such a way that its shares may become more
valuable; and
WHEREAS, the Employee is employed by the Company or one of its
subsidiaries as an officer or key employee;
NOW, THEREFORE, in consideration of the premises and of the
services to be performed by the Employee, the Company hereby grants this stock
option to the Employee on the terms and conditions hereinafter expressed.
1. OPTION GRANT
------------
The Company hereby grants to the Employee an option to purchase a
total of ______ shares of Common Stock of the Company at an option price of
$30.188 per share, being not less than 100% of the fair market value of the
stock on the date hereof. This option is intended to qualify as an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended.
12
2. TIME OF EXERCISE
----------------
This option may be exercised (in the manner described in paragraph
3 hereof) in whole or in part, at any time and from time to time, subject to
the following limitations:
(a) This option may not be exercised to any extent until
December 20, 1999, at which time it will become fully exercisable. However,
in the event that the Employee's employment with the Company or a subsidiary
terminates by reason of retirement, permanent total disability or death prior
to December 20, 1999, then this option shall become fully exercisable upon
such termination. In addition, this option shall become fully exercisable
upon a Change of Control of the Company as defined in paragraph 11 of the Plan
except notwithstanding any other provisions of the Plan, none of the
transactions contemplated by the Amended and Restated Agreement and Plan of
▇▇▇▇▇▇, dated as of April 28, 1995, as amended and restated as of July 26,
1995 by and among Northern States Power Company, Wisconsin Energy Corporation,
Northern Power Wisconsin Corp., and WEC Sub Corp., shall constitute a Change
in Control for purposes of the Plan.
(b) This option may not be exercised:
(i) more than three months after the termination of the
Employee's employment with the Company or a subsidiary
for any reason other than retirement, permanent total
disability or death; or
(ii) more than twelve months after termination of
employment by reason of permanent total disability or
death; or
(iii) more than three years after termination of employment
by retirement; or
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(iv) more than ten years from the date hereof.
For these purposes retirement and permanent total disability shall
be determined in accordance with the established policies of the
Company applicable to officers and other key employees.
3. METHOD OF EXERCISE
------------------
This option may be exercised only by appropriate notice in writing delivered
to the Secretary of the Company and accompanied by:
(a) a check payable to the order of the Company for the full
purchase price of the shares purchased, and
(b) such other documents or representations as the Company may
reasonably request in order to comply with securities, tax
or other laws then applicable to the exercise of the option.
Payment of the purchase price may be made in whole or in part by the delivery
of shares of Common Stock owned by the Employee (or by certification of the
Employee's ownership of such shares), valued at fair market value on the date
of exercise. 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.
4. NON-TRANSFERABILITY; DEATH
--------------------------
This option is not transferable by the Employee otherwise than by
will or the laws of descent and distribution and is exercisable during the
Employee's lifetime only by the Employee. If the Employee dies during the
option period, this option may be exercised in whole or in part and from time
to time, in the manner described in paragraph 3 hereof, by the Employee's
estate or the person to whom the option passes by will or the laws of descent
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14
and distribution, but only within a period of (a) twelve months after the
Employee's death or (b) ten years from the date hereof, whichever period is
shorter.
5. 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.
6. 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
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15
indebtedness, other property or any combination thereof (the "Acquisition
Consideration"), whether as a result of reorganization, sale, merger,
consolidation, or other similar transaction, the Company 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.
7. CONTINGENT DIVIDEND AWARD
-------------------------
The company hereby grants to the Employee a contingent dividend
award on a number of shares equal to the number of shares covered by this
option agreement, entitling the Employee to receive the equivalent of the cash
dividends that would have been paid over a four-year period commencing
December 20, 1995 (the Performance Period) on such shares, providing the
conditions set forth herein are satisfied.
A contingent dividend award will only be payable if the Company
achieves a total shareholder return over the Performance Period that is equal
to or exceeds the median return earned by the companies in the Company's
industry peer group, except that there will be no payout if the Company's
total shareholder return is negative over the Performance Period. No interest
is payable on amounts accumulated with respect to the contingent dividend
award prior to payment. The contingent dividend award will be forfeited if
the Employee does not remain in the employ of the Company or a subsidiary
through the end of the Performance Period.
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IN WITNESS WHEREOF, the Company has caused the execution hereof by
its duly authorized officer and Employee has agreed to the terms and
conditions of this option, all as of the date first above written.
WISCONSIN ENERGY CORPORATION
By
---------------------------------
Assistant Secretary
---------------------------------
Employee
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WISCONSIN ENERGY CORPORATION
NON-QUALIFIED STOCK OPTION AND CONTINGENT DIVIDEND AWARD
--------------------------------------------------------
THIS NON-QUALIFIED STOCK OPTION, dated the 20th day of December
1995, is granted by WISCONSIN ENERGY CORPORATION (the "Company"), to
________________ (the "Employee") pursuant to the Company's 1993 Omnibus Stock
Incentive Program (the "Plan").
WHEREAS, the Company believes it to be in the best interests of
the Company, its subsidiaries and its stockholders for its officers and other
key employees to obtain or increase their stock ownership interest in the
Company in order that they will thus have a greater incentive to work for and
manage the Company's affairs in such a way that its shares may become more
valuable; and
WHEREAS, the Employee is employed by the Company or one of its
subsidiaries as an officer or key employee;
NOW, THEREFORE, in consideration of the premises and of the
services to be performed by the Employee, the Company hereby grants this stock
option to the Employee on the terms and conditions hereinafter expressed.
1. OPTION GRANT
------------
The Company hereby grants to the Employee an option to purchase a
total of ____ shares of Common Stock of the Company at an option price of
$_____ per share, being not less than 100% of the fair market value of the
stock on the date hereof. This option is not intended to qualify as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
18
2. TIME OF EXERCISE
----------------
This option may be exercised (in the manner described in paragraph
3 hereof) in whole or in part, at any time and from time to time, subject to
the following limitations:
(a) This option may not be exercised to any extent until
December 20, 1999, at which time it will become fully exercisable. However,
in the event that the Employee's employment with the Company or a subsidiary
terminates by reason of retirement, permanent total disability or death prior
to December 20, 1999, then this option shall become fully exercisable upon
such termination. In addition, this option shall become fully exercisable
upon a Change of Control of the Company as defined in paragraph 11 of the Plan
except notwithstanding any other provisions of the Plan, none of the
transactions contemplated by the Amended and Restated Agreement and Plan of
▇▇▇▇▇▇, dated as of April 28, 1995, as amended and restated as of July 26,
1995 by and among Northern States Power Company, Wisconsin Energy Corporation,
Northern Power Wisconsin Corp., and WEC Sub Corp., shall constitute a Change
in Control for purposes of the Plan.
(b) This option may not be exercised:
(i) more than three months after the termination of the
Employee's employment with the Company or a subsidiary
for any reason other than retirement, permanent total
disability or death; or
(ii) more than twelve months after termination of
employment by reason of permanent total disability or
death; or
(iii) more than three years after termination of employment
by retirement; or
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(iv) more than ten years from the date hereof.
For these purposes retirement and permanent total disability shall
be determined in accordance with the established policies of the
Company applicable to officers and other key employees.
3. METHOD OF EXERCISE
------------------
This option may be exercised only by appropriate notice in writing
delivered to the Secretary of the Company and accompanied by:
(a) a check payable to the order of the Company for the full
purchase price of the shares purchased and any required tax
withholding, and
(b) such other documents or representations as the Company may
reasonably request in order to comply with securities, tax
or other laws then applicable to the exercise of the option.
Payment of the purchase price may be made in whole or in part by the delivery
of shares of Common Stock owned by the Employee (or by certification of the
Employee's ownership of such shares), valued at fair market value on the date
of exercise. 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.
The Employee may satisfy any tax withholding obligation in whole or in part by
electing to have the Company retain option shares having a fair market value
on the date of exercise equal to the amount required to be withheld.
4. NON-TRANSFERABILITY; DEATH
--------------------------
This option is not transferable by the Employee otherwise than by
will or the laws of descent and distribution and is exercisable during the
Employee's lifetime only by the Employee. If the Employee dies during the
option period, this option may be exercised in whole or in part and from time
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20
to time, in the manner described in paragraph 3 hereof, 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) twelve months after the
Employee's death or (b) ten years from the date hereof, whichever period is
shorter.
5. 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.
6. 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
- 4 -
21
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 Company 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.
7. CONTINGENT DIVIDEND AWARD
-------------------------
The company hereby grants to the Employee a contingent dividend
award on a number of shares equal to the number of shares covered by this
option agreement, entitling the Employee to receive the equivalent of the cash
dividends that would have been paid over a four-year period commencing
December 20, 1995 (the Performance Period) on such shares, providing the
conditions set forth herein are satisfied.
A contingent dividend award will only be payable if the Company
achieves a total shareholder return over the Performance Period that is equal
to or exceeds the median return earned by the companies in the Company's
industry peer group, except that there will be no payout if the Company's
total shareholder return is negative over the Performance Period. No interest
is payable on amounts accumulated with respect to the contingent dividend
award prior to payment. The contingent dividend award will be forfeited if
the Employee does not remain in the employ of the Company or a subsidiary
through the end of the Performance Period.
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22
IN WITNESS WHEREOF, the Company has caused the execution hereof by
its duly authorized officer and Employee has agreed to the terms and
conditions of this option, all as of the date first above written.
WISCONSIN ENERGY CORPORATION
By________________________________
Assistant Secretary
________________________________
Employee
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