WPS RESOURCES CORPORATION NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit
99.2
WPS
RESOURCES CORPORATION
THIS
AGREEMENT is
entered into on ____________, 200___ (the “Grant Date”), by and between WPS
RESOURCES CORPORATION (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 WPS Resources Corporation
2005 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 $___________ (the average of the highest and lowest stock prices
as reported on the New York Stock Exchange as of ____________, 200__).
[Insert
date of grant]
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 shall 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 other than retirement on or after age fifty-five, death or disability
(as defined in the Company’s long-term disability plan), any Optioned Shares not
vested as of the date of such termination will be cancelled.
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 _______________, 200__, [insert
first anniversary of grant date] and
ending:
| 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 on or
after age
fifty-five, death or disability (as defined in the Company’s long-term
disability plan); or
|
| b. |
in
any other
case, _________________, 201__ [insert
10th
anniversary of grant date].
|
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) 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
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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 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,
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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, extend or renew 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 Agreement without
the written consent of the Optionee.
(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 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 Wisconsin 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 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, 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. At the Company’s election, such action or other legal
proceeding shall be heard pursuant to a bench trial and, if so elected, 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.
WPS
RESOURCES
CORPORATION
By:
___________________________
Title:
__________________________
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ACKNOWLEDGEMENT
FORM
I
have read the
terms of the WPS Resources Corporation Nonqualified Stock Option Agreement,
dated _________________, _______, 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 SECRETARY
OF
THE COMPANY. YOUR OPTION WILL NOT BECOME EFFECTIVE UNTIL THE COMPANY RECEIVES
THIS ACKNOWLEDGMENT FORM.
