Exhibit 10.2

WPS RESOURCES CORPORATION
PERFORMANCE STOCK RIGHT AGREEMENT

 

        THIS AGREEMENT is entered into as of ________________, _____, (the
"Grant Date"), by and between WPS RESOURCES CORPORATION (the "Company"), and
__________________ ____________________ (the "Participant"). This Agreement sets
forth the terms, rights and obligations of the parties with respect to the grant
of Performance Stock Rights to the Participant. This agreement shall not become
effective until the Participant signs and returns the "Acknowledgement Form"
attached hereto.

        The Performance Stock Rights are granted under, and are subject to, the
terms of the WPS Resources Corporation 2001 Omnibus Incentive Compensation Plan
(the "Plan"), which are specifically incorporated by reference in this
Agreement. Any capitalized 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 Performance Stock Rights. (a) Subject to the terms of this
Agreement, the Company grants to the Participant Performance Stock Rights
representing the right to receive ______ shares ("Target Award"), of the common
stock of the Company, par value $1.00 ("Stock"), in the event certain
Performance Goals specified herein are satisfied. The Participant obtains no
ownership interest in the Company and will not be considered a shareholder of
the Company by virtue of the grant of Performance Stock Rights hereunder until
such time as Stock may be issued to the Participant as a Final Award.

        (b) In the event of certain corporate transactions described in
Section 12 of the Plan, the number of Performance Stock Rights may 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. Performance Period. Subject to the provisions of Section 8, the period
from January 1, 2005 to December 31, 2007.

    3. Performance Measures.

        (a) Total Shareholder Return ("TSR"). The quotient obtained by dividing
(1) the Shareholder Return with respect to a share of common stock, by (2) the
Beginning Market Price of a share of common stock. For this purpose:

> > (1) The Shareholder Return means the cash dividends paid on a share of
> > common stock during the Performance Period, increased by (if positive) or
> > reduced by (if negative) the change in stock price from the Beginning Market
> > Price of a share of common stock to the Ending Market Price of a share of
> > common stock.

<PAGE>

 

> > (2) The Beginning Market Price of a share of common stock is the average
> > closing market price of a share of common stock for the 30 trading days
> > immediately preceding the first day of the Performance Period as reported by
> > the securities exchange on which such stock is principally traded.
> > 
> > (3) The Ending Market Price of a share of common stock is the average
> > closing market price of a share of common stock for the 30 trading days
> > immediately preceding the last day of the Performance Period as reported by
> > the securities exchange on which such stock is principally traded.

        (b) Comparison Group. All of the companies included in the Towers Perrin
database of publicly traded electric power companies.

    4. Determination of Final Awards.

        (a) Presumptive Award. As soon as practicable following the completion
of the Performance Period, the Committee will determine the TRS of the Company
and of each company in the Comparison Group. The Committee's determination will
be final and binding on all persons. The Participant's presumptive award shall
be determined in accordance with the following table; provided that any
fractional share of Stock that would otherwise result from the foregoing
calculation shall be disregarded.

Company TSR In Relation to
TSR of All Comparison Group
Companies 

Presumptive Award Equal to
the Following Percentage of
the Target Award

> 90th Percentile or Greater
> 80th Percentile
> 70th Percentile
> 60th Percentile
> 50th Percentile
> 45th Percentile
> 40th Percentile
> 35th Percentile
> Below the 35th Percentile

200%
175%
150%
125%
100%
75%
50%
25%
0%

The presumptive award will be interpolated for Company TSR that is above the
35th percentile and below the 90th percentile and that is between the
percentiles enumerated in the forgoing table.

        (b) Final Award. The Presumptive Award is used as a guideline for the
Committee in determining the Final Award to be made to the Participant, and the
Participant obtains no rights as a result of the determination of the
Presumptive Award. In determining the 

-2-

<PAGE>

 

Final Award to be made to the Participant, the Committee, in its sole
discretion, may increase or decrease the amount of the Presumptive Award;
provided that the Committee will not increase the amount of the Presumptive
Award applicable to the Participant if the Participant is a Covered Executive
(as defined in the Plan) for purposes of Section 162(m) of the Internal Revenue
Code.

    5. Dividend Equivalents. The Participant shall not receive any cash or other
consideration to reflect dividends that would have been paid or accrued had the
Performance Stock Rights been actual shares of Stock during the Performance
Period.

    6. Effect of Termination of Employment.

        (a) Except as set forth in subsection (b) below and Section 8 below, or
as otherwise determined by the Committee, the Performance Stock Rights will be
cancelled immediately and without notice to the Participant, and no Final Award
will be made, in the event of the Participant's termination of employment from
the Company and its Affiliates prior to the last day of the Performance Period.

        (b) The Participant's Performance Stock Rights will not be cancelled
upon termination of employment, and the Participant (or the Participant's
estate) may receive a Final Award in accordance with Section 4, if the
Participant's termination of employment is on account of death or disability (as
defined in the Company's long-term disability plan), or if the Participant
terminates employment at least one year after the beginning of the Performance
Period and if such termination is on account of retirement on or after age
fifty-five.

    7. Change in Control. Upon the occurrence of a Change of Control (as defined
in the Plan), the Performance Period shall be terminated, and the Participant
will be entitled to a Final Award based upon the Target Award (or, if greater,
the then projected Final Award) prorated for the portion of the Performance
Period that has been completed as of the date of the Change in Control.

    8. Tax Withholding. Upon the issuance of Stock pursuant to a Final Award,
the Company may satisfy its withholding obligations in any manner determined by
the Committee, including by withholding a portion of the Participant's
compensation or by withholding a number of the shares of Stock included in any
Final Award 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 Participant in cash. The Company may also require the Participant
to deliver a check for the Company's withholding tax obligation prior to
effecting the transfer of shares pursuant to a Final Award.

-3-

<PAGE>

 

    9. Miscellaneous.

        (a) The Participant (or his legal representatives, the executor of his
estate or his heirs) shall not be deemed to be a shareholder of the Company with
respect to any of the Performance Stock Rights until shares of Stock have been
issued pursuant to a Final Award and the Company's withholding tax liability has
been satisfied, to the Committee's satisfaction.

        (b) The Performance Stock Rights shall not be transferable by the
Participant; provided that following the Participant's death, any Final Award
made with respect to the Participant will be paid to the Participant's estate or
to such person as the executor of the estate certifies as being entitled to such
payment as a result of the operation of the Participant'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 Participant's employment at any time nor confer
upon the Participant any right to continue in the employ of the Company or any
Affiliate.

        (d) As a condition of the granting of Performance Stock Rights under
this Agreement, the Participant agrees, for himself and 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, binding and conclusive on the Participant, his legal
representatives, the executor of his estate and his heirs. The Participant, 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 the Performance Stock
Rights at any time. However, no modification, extension or renewal shall (i)
confer on the Participant any right or benefit which he would not be entitled to
if new Performance Stock Rights were granted under the Plan at such time or (ii)
alter, impair or adversely affect the Performance Stock Rights or this Agreement
without the written consent of the Participant; provided that the Committee
shall not take any such action with respect to a Participant who is a Covered
Executive (as defined in the Plan) if such action would cause any Final Award
granted to the Participant to cease to qualify as "qualified performance-based
compensation" for purposes of Section 162(m) of the Internal Revenue Code.

        (f) No shares of Stock will be issued pursuant to a Final Award unless
and until the Company has determined to its satisfaction that such issuance
complies with all relevant provisions of applicable law, including the
requirements of any stock exchange on which the Stock may then be traded.

    10. 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 

-4-

<PAGE>

 

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 Brown 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.

    11. 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.

    12. 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: Senior VP - Human Resources

-5-

<PAGE>

 

ACKNOWLEDGEMENT FORM

 

 

I have read the terms of the WPS Resources Corporation Performance Stock Right
Agreement, dated December 8, 2004, and I hereby declare that I understand and
agree to be bound by the terms and conditions of the Agreement.

 

> > > > > > > > > > > > >  
> > > > 
> > > > ____________________________________
> > > > Participant
> > > > 
> > > >  
> > > > 
> > > > Print name:  ___________________________
> > > > 
> > > > > > > > > > > > >  
> > > > > > > > > > > > > 
> > > > > > > > > > > > >  

PLEASE DETACH THIS ACKNOWLEDGEMENT FORM FROM THE PERFORMANCE STOCK RIGHT
AGREEMENT AND RETURN IT TO CARMINE NELL IN HUMAN RESOURCES. YOUR PERFORMANCE
STOCK RIGHT WILL NOT BECOME EFFECTIVE UNTIL THE COMPANY RECEIVES THIS
ACKNOWLEDGMENT FORM.

 

<PAGE>