PERSONAL AND CONFIDENTIAL April 2, 2009 Mark A. Radtke Green Bay, WI 54313-8554 Re: Incentive Agreement Dear Mark:
Exhibit
10.29
PERSONAL AND
CONFIDENTIAL
April 2,
2009
Xxxx X.
Xxxxxx
0000 Xxxxxxx Xxxxx
Xx
Xxxxx Xxx, XX
00000-0000
Re: Incentive
Agreement
Dear
Xxxx:
As you know,
Integrys Energy Group, Inc., (the “Company”) is engaged in a restructuring
process for its wholly owned subsidiary, Integrys Energy Services, Inc.
(“TEGE”). This restructuring may involve the sale or transfer of all
or portions of TEGE’s and its subsidiaries’ business, and/or an internal
reorganization or re-sizing of that business (collectively, the “TEGE
Restructuring”). In an effort to ensure business continuity, preserve value and
facilitate the TEGE Restructuring (the “Objective”), the Company is therefore
willing to enter into this incentive agreement (this “Agreement”) with you,
subject to the provisions set forth herein.
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1.
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Definitions. In
this Agreement, the following terms have the meanings
indicated: (a) “Purchaser” means any person or entity that
acquires part or all of TEGE or TEGE’s business in connection with the
TEGE Restructuring, specifically excluding TEGE itself, the Company, and
any entity 80% or more of whose equity interest is owned, directly or
indirectly, by the Company; and (b) “Acquisition” means the acquisition of
part or all of TEGE or TEGE’s business by a Purchaser in connection with
the TEGE Restructuring.
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2.
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Eligibility
Guidelines. The Company, in its reasonable discretion,
will determine whether you are eligible to receive an award of the target
incentive (“TEGE Restructuring Incentive”) under this
Agreement. In determining your eligibility for the TEGE
Restructuring Incentive, the Company will consider several factors
including but not limited to the
following:
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a.
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The Company
and TEGE obtain the Objective pursuant to the TEGE
Restructuring;
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b.
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You accomplish
a sale of all or major core portions of the TEGE business obtaining full
value for the forward book and the return of working
capital;
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c.
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You
accomplish a sale of substantial parts of the TEGE business such as
product or regional forward books;
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d.
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You
accomplish a timely wind-down of the TEGE
business;
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e.
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You
accomplish an alternative result agreed to and approved by the
Company;
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f.
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You maintain
a Company value perspective in all
decisions;
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g.
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You cooperate
fully in achieving the TEGE Restructuring and meeting the Objective,
including but not limited to cooperating with all constituents such as the
Company management team, internal service provider, and third party
service providers (investment bankers, consultants, outside counsel and
others associated with the TEGE
Restructuring.)
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You have no
entitlement to a TEGE Restructuring Incentive unless and until you are awarded a
TEGE Restructuring Incentive by the Company.
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3.
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Amount and
Payment. The amount of your target TEGE Restructuring Incentive is
$1,500,000 (One Million
Five Hundred Thousand Dollars). This is a target amount
only and may be modified by the Company in its discretion. As
soon as practicable after the date on which the Company determines that
the TEGE Restructuring has been completed (the “TEGE Restructuring
Completion Date”), the Company shall determine under Paragraph 2 whether a
TEGE Restructuring Incentive will be awarded. Unless a
forfeiture condition identified in Paragraph 4 applies, or the Company
determines you are otherwise ineligible to receive the TEGE Restructuring
Incentive pursuant to Paragraph 2, the TEGE Restructuring Incentive will
be paid as soon as reasonably possible after the date on which the Company
awards a TEGE Restructuring Incentive to you but not later than March 15
of the calendar year following the calendar year in which the Company
awards a TEGE Restructuring Incentive to you. The payment will be
reflected as a bonus payment subject to usual and customary withholding
amounts. It will be directly deposited into your primary
account as shown in our records.
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4.
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Forfeiture. You
shall forfeit your right to the TEGE Restructuring Incentive if (i) you
voluntarily terminate your employment with TEGE or the Company before the
TEGE Restructuring Completion Date, except for a termination in
conjunction with your accepting employment, with Company’s consent, with a
Purchaser in connection with an Acquisition; (ii) your employment is
terminated by TEGE or the Company for cause before the TEGE Restructuring
Completion Date; or (iii) you die or become disabled before the TEGE
Restructuring Completion Date. For purposes of this Agreement,
“cause” shall mean (I) your violation of Paragraph 5 (Confidentiality) or
any other provision of this Agreement, (II) willful misconduct by you or
regular neglect in the performance of your duties and responsibilities to
TEGE or the Company, or unsatisfactory job performance by you, or (III)
your violation of any written agreement between you and TEGE and/or the
Company, or your violation of any TEGE or Company policy or agreement,
including but not limited to any policy concerning fair employment
practices, confidentiality, non-solicitation or
non-competition. “Disability” or “disabled” shall have the
meaning set forth in the long-term disability benefits plan (permanent
disability) covering employees of TEGE or the
Company.
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5.
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Confidentiality. The
TEGE Restructuring Incentive is payable to you only if you keep the
existence and terms of this Agreement strictly
confidential. You agree not to disclose this Agreement or any
information concerning this Agreement to other employees of TEGE, the
Company or its affiliates, or to any TEGE or Company customers or
suppliers, or to any other third party, except your spouse, attorney,
financial advisor, accountant, or as may be required by
law. This confidentiality commitment on your part is material
to this Agreement and will remain in full force and effect after any TEGE
Restructuring Incentive is paid.
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6.
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Terms and
Conditions. The following terms and conditions also apply to this
Agreement:
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(i) The
offer or provision of any TEGE Restructuring Incentive under this Agreement is
not an offer of a contract of employment by TEGE or the Company and does not
alter your current employment status with TEGE or the Company.
(ii) You
may not sell, assign, pledge or otherwise transfer your right to any portion of
the TEGE Restructuring Incentive, and any purported sale, assignment, pledge or
transfer is void.
(iii) In
the event that any arbitrator or court of competent jurisdiction holds or finds
any term or provision of this Agreement to be invalid or illegal under
applicable law, the remaining terms and provisions shall continue to be fully
effective.
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(iv) It
is expressly understood and agreed that if you receive payment of the TEGE
Restructuring Incentive in accordance with this Agreement, that payment is in
addition to any other compensation or benefits for which you may be eligible by
reason of your employment with TEGE or the Company. Notwithstanding the
foregoing, in the event your Key Executive Employment and Severance Agreement
with the Company dated January 1, 2009, is triggered prior to the TEGE
Restructuring Completion Date, the Company reserves the right to modify the
target TEGE Restructuring Incentive set forth herein.
(vi) Any
amounts paid hereunder are not intended to constitute “deferred compensation”
subject to the election and distribution requirements of Section 409A of the
Internal Revenue Code.
(vii) Notwithstanding
any other provision of this Agreement, if any portion of any TEGE Restructuring
Incentive awarded to you, in conjunction with any other payment to which you are
entitled under any other agreement with or plan of the Company or its affiliates
(in its aggregate, “Total Payments”), would constitute an “excess parachute
payment” that is subject to the tax (the “Excise Tax”) imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor
provision, then the Total Payments to be made to you shall be reduced such that
the value of the aggregate Total Payments that you are entitled to receive shall
be One Dollar ($1) less than the maximum amount which you may receive without
becoming subject to the tax imposed by Section 4999 of the Code (or any
successor provision); provided that the foregoing reduction in the amount of
Total Payments shall not apply if the after-tax value to you of the Total
Payments prior to reduction in accordance with this paragraph is greater than
the after-tax value to you if Total Payments are reduced in accordance with this
paragraph. For purposes of determining the after-tax value of Total
Payments, you will be deemed to pay federal income taxes and employment taxes at
the highest marginal rate of federal income and employment taxation in the
calendar year in which the TEGE Restructuring Incentive is to be paid and state
and local income taxes at the highest marginal rates of taxation in the state
and locality of your domicile for income tax purposes on the date the TEGE
Restructuring Incentive payment is made, net of the maximum reduction in federal
income taxes that may be obtained from deduction of such state and local
taxes.
(viii) No
verbal or written representations made by TEGE or Company employees or others
that are contrary or in addition to the terms set forth in this Agreement shall
be binding upon TEGE, the Company, or any other affiliate of the Company, or
their respective shareholders, directors, officers, employees or
agents. As used in this Agreement, the term “TEGE” also includes any
successor in interest to TEGE. This Agreement may be amended only in
a writing signed by you and by the Executive Chairman or President and CEO of
the Company.
(ix) In
the event of any dispute or controversy over the meaning or application of any
provision of this Agreement, you and the Company shall meet to discuss the
dispute and attempt to resolve it in good faith. If you and the
Company are unable to resolve the dispute, however, you agree that it will be
submitted to an arbitrator for final and binding resolution, pursuant to the
rules of the American Arbitration Association. Any such arbitration
shall take place in Wisconsin. This Agreement shall be governed by
the internal laws of the State of Wisconsin.
(x) Any
amounts paid hereunder shall not constitute compensation for purposes of any
retirement plan or other plan, program, policy or contract covering the Company
and its affiliates and shall not entitle you to a benefit under any plan,
program, policy or
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contract which is
greater than the benefit to which you would have been entitled had such amounts
not been paid.
Please confirm your
agreement with and acceptance of the terms of this Agreement by dating and
signing the enclosed copy and returning it to me no later than April 24,
2009.
Sincerely
yours,
/s/ Xxxxx X. Xxxxxx
Xxxxx X.
Xxxxxx
Executive
Chairman
Accepted and Agreed
to:
Signature: /s/ Xxxx X. Xxxxxx
Print Name: March X. Xxxxxx
Date: 6/30/09
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