Exhibit 10.14

 

INTEGRYS ENERGY GROUP, INC.

PERFORMANCE STOCK RIGHT AGREEMENT

 

You have been granted a Performance Stock Right with respect to shares of common
stock of Integrys Energy Group, Inc. (the “Company”) under the Integrys Energy
Group, Inc. 2010 Omnibus Incentive Compensation Plan (the “Plan”). This
Agreement sets forth the terms, rights and obligations of you and the Company
with respect to your Performance Stock Right. This Agreement shall not become
effective until you sign and return the “Acknowledgement Form” from this
Agreement to Human Resources.

 

The Performance Stock Right is granted under, and is subject to, the terms of
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.

 

1.             Grant of Performance Stock Right. (a) Subject to the terms of
this Agreement, the Company grants to you a Performance Stock Right representing
shares (“Target Award”), of the common stock of the Company, par value $1.00
(“Common Stock”), in the event certain Performance Goals specified herein are
satisfied. You obtain no ownership interest in the Company and will not be
considered a shareholder of the Company by virtue of the grant of the
Performance Stock Right hereunder until such time as Common Stock may be issued
to you as a Final Award.

 

(b)           In the event of certain corporate transactions described in
Section 12 of the Plan, the number of shares of Common Stock represented by your
Performance Stock Right will 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 7, the
Performance Period is the period from January 1, 2012 to December 31, 2014.

 

3.             Performance Measures.

 

(a)           Total Shareholder Return (“TSR”). TSR is 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.

 

(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

 

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trading days immediately preceding the first day of the Performance Period as
reported on 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 ending
on or immediately preceding the last day of the Performance Period as reported
on the securities exchange on which such stock is principally traded.

 

(b)           Comparison Group. Comparison Group means all utility industry
companies in the Standard and Poor’s 1500 Index on both the first day and the
last day of the Performance Period.

 

4.             Determination of Presumptive and Final Awards.

 

(a)           Presumptive Award. As soon as practicable following the completion
of the Performance Period, the Committee will determine the TSR of the Company
and of each company in the Comparison Group. The Committee’s determination will
be final and binding on all persons. Your Presumptive Award shall be determined
in accordance with the following table; provided that any fractional share of
Common 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

 

200

%

75th Percentile

 

150

%

50th Percentile

 

100

%

25th Percentile

 

50

%

Below the 25th Percentile

 

0

%

 

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*The Presumptive Award for TSR performance between points on the payout schedule
will be interpolated.

 

(b)           Final Award. The Presumptive Award is used as a guideline for the
Committee in determining your Final Award, and you obtain no rights as a result
of the determination of the Presumptive Award. In determining the Final Award to
be made to you, 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 your Presumptive Award if the Final Award is intended to
comply with Section 162(m) of the Internal Revenue Code and if you are a Covered
Executive (as defined in the Plan) for purposes of Section 162(m) of the
Internal Revenue Code. Except with respect to the portion (if any) of the Final
Award payment of which is deferred in accordance with the Integrys Energy
Group, Inc. Deferred Compensation Plan, the Final Award will be distributed to
you between January 1 and March 15 of the calendar year following the calendar
year in which the Performance Period ends.

 

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5.             Dividend Equivalents. You will not receive any cash or other
consideration to reflect dividends that would have been paid or accrued had the
Performance Stock Right been actual shares of Stock either during the
Performance Period or at any time prior to actual distribution of your Final
Award.

 

6.             Effect of Termination of Employment.

 

(a)           Except as set forth in subsections (b) and (c) below and Section 7
below, or as otherwise determined by the Committee, your Performance Stock Right
will be cancelled immediately and without notice to you, and no Final Award will
be made, in the event you terminate employment from the Company and its
Affiliates prior to the last day of the Performance Period.

 

(b)           [Standard Paragraph (b) — For use with regular grants made in
February or March of each year.] If your employment or service terminates prior
to the last day of the Performance Period as a result of death or disability (as
determined by the Committee based upon the definition set forth in the Company’s
long-term disability plan), your Performance Stock Right will not be cancelled
(or will be only partially cancelled) upon termination of employment: (1) if
your termination occurs on or after December 31 of the calendar year in which
occurs the Grant Date of your Performance Stock Right, you (or your estate) may
be eligible to receive a Final Award, determined in accordance with Section 4
and this Section 6, following the conclusion of the Performance Period, or
(2) if your termination occurs prior to December 31 of the calendar year in
which occurs the Grant Date of your Performance Stock Right, you (or your
estate) may be eligible to receive a pro-rated Final Award, determined in
accordance with Section 4 and this Section 6, following the conclusion of the
Performance Period (and only the remainder of your Performance Stock Right will
be cancelled). The pro-rated award for which you are eligible shall be equal to
the Final Award to which you otherwise would have been entitled if employment
had not terminated, multiplied by a fraction, the numerator of which is the
number of full months of service that you completed during the calendar year in
which occurs the Grant Date of your Performance Stock Right, and the denominator
of which is twelve (12). If the foregoing calculation results in vesting of a
fractional share, the number of shares included in your Final Award will be
rounded to the next higher whole number of shares. Except with respect to the
portion (if any) of the Final Award payment of which is deferred in accordance
with the Integrys Energy Group, Inc. Deferred Compensation Plan, the Final Award
will be distributed to you (or your estate) between January 1 and March 15 of
the calendar year following the calendar year in which the Performance Period
ends.

 

[Alternate Paragraph (b) — For use in mid-year special grants where proration
based on the calendar year might result in substantial vesting shortly following
the Grant Date. Under the alternate paragraph, proration is based on the number
of months of employment completed during the one year period from the first day
of the month in which occurs the Grant Date.] If your employment or service
terminates prior to the last day of the Performance Period as a result of death
or disability (as determined by the Committee based upon the definition set
forth in the Company’s long-term disability plan), your Performance Stock Right
will not be cancelled (or will be only partially cancelled) upon termination of
employment: (1) if your termination occurs on or after the first day of the
twelfth

 

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(12th) month following the month in which occurs the Grant Date of your
Performance Stock Right, you (or your estate) may be eligible to receive a Final
Award, determined in accordance with Section 4 and this Section 6, following the
conclusion of the Performance Period, or (2) if your termination occurs prior to
the first day of the twelfth (12th) month following the month in which occurs
the Grant Date of your Performance Stock Right, you (or your estate) may be
eligible to receive a pro-rated Final Award, determined in accordance with
Section 4 and this Section 6, following the conclusion of the Performance Period
(and only the remainder of your Performance Stock Right will be cancelled). The
pro-rated award for which you are eligible shall be equal to the Final Award to
which you otherwise would have been entitled if employment had not terminated,
multiplied by a fraction, the numerator of which is the number of full months of
service that you completed during the twelve (12) month period that begins on
the first day of the month following the month in which occurs the Grant Date of
your Performance Stock Right, and the denominator of which is twelve (12). If
the foregoing calculation results in vesting of a fractional share, the number
of shares included in your Final Award will be rounded to the next higher whole
number of shares. Except with respect to the portion (if any) of the Final Award
payment of which is deferred in accordance with the Integrys Energy Group, Inc.
Deferred Compensation Plan, the Final Award will be distributed to you (or your
estate) between January 1 and March 15 of the calendar year following the
calendar year in which the Performance Period ends.

 

(c)           [Standard Paragraph (c) — For use with regular grants made in
February or March of each year.] If your employment or service terminates prior
to the last day of the Performance Period as a result of retirement on or after
age fifty-five (55) with ten (10) or more years of service, or retirement on or
after age sixty-two (62) (“Retirement”), your Performance Stock Right will not
be cancelled (or will be only partially cancelled) upon termination of
employment: (1) if your Retirement occurs on or after December 31 of the
calendar year in which occurs the Grant Date of your Performance Stock Right,,
you may be eligible to receive a Final Award, determined in accordance with
Section 4 and this Section 6, following the conclusion of the Performance
Period, and (2) if your Retirement occurs prior to December 31 of the calendar
year in which occurs the Grant Date of your Performance Stock Right, you may be
eligible to receive a pro-rated Final Award, determined in accordance with
Section 4 and this Section 6, following the conclusion of the Performance Period
(and only the remainder of your Performance Stock Right will be cancelled). The
pro-rated award shall be equal to the Final Award to which you otherwise would
have been entitled if employment had not terminated, multiplied by a fraction,
the numerator of which is the number of full months of service that you
completed during the calendar year in which occurs the Grant Date of your
Performance Stock Right, and the denominator of which is twelve (12). If the
foregoing calculation results in vesting of a fractional share, the number of
shares included in your Final Award will be rounded to the next higher whole
number of shares. Except with respect to the portion (if any) of the Final Award
payment of which is deferred in accordance with the Integrys Energy Group, Inc.
Deferred Compensation Plan, the Final Award will be distributed to you between
January 1 and March 15 of the calendar year following the calendar year in which
the Performance Period ends.

 

[Alternate Paragraph (c) — For use in mid-year special grants where proration
based on the calendar year might result in substantial vesting shortly following

 

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the Grant Date. Under the alternate paragraph, proration is based on the number
of months of employment completed during the one year period from the first day
of the month in which occurs the Grant Date.] If your employment or service
terminates prior to the last day of the Performance Period as a result of
retirement on or after age fifty-five (55) with ten (10) or more years of
service, or retirement on or after age sixty-two (62) (“Retirement”), your
Performance Stock Right will not be cancelled (or will be only partially
cancelled) upon termination of employment: (1) if your Retirement occurs on or
after first day of the twelfth (12th) month following the month in which occurs
the Grant Date of your Performance Stock Right,, you may be eligible to receive
a Final Award, determined in accordance with Section 4 and this Section 6,
following the conclusion of the Performance Period, and (2) if your Retirement
occurs prior to first day of the twelfth (12th) month following the month in
which occurs the Grant Date of your Performance Stock Right, you may be eligible
to receive a pro-rated Final Award, determined in accordance with Section 4 and
this Section 6, following the conclusion of the Performance Period (and only the
remainder of your Performance Stock Right will be cancelled). The pro-rated
award shall be equal to the Final Award to which you otherwise would have been
entitled if employment had not terminated, multiplied by a fraction, the
numerator of which is the number of full months of service that you completed
during the twelve (12) month period that begins on the first day of the month
following the month in which occurs the Grant Date of your Performance Stock
Right, and the denominator of which is twelve (12). If the foregoing calculation
results in vesting of a fractional share, the number of shares included in your
Final Award will be rounded to the next higher whole number of shares. Except
with respect to the portion (if any) of the Final Award payment of which is
deferred in accordance with the Integrys Energy Group, Inc. Deferred
Compensation Plan, the Final Award will be distributed to you between January 1
and March 15 of the calendar year following the calendar year in which the
Performance Period ends.

 

7.             Change in Control. In general, you may be entitled to a Final
Award, even if not otherwise entitled to a Final Award in accordance with the
Sections 4 and 6 above, if (1) a Change in Control (as defined in the Plan) has
occurred and (2) your employment with the Company and its Affiliates has been
involuntarily terminated for any reason other than Cause (or, if you have in
effect with the Company or an Affiliate an employment, retention, change in
control, severance or similar agreement that provides for “good reason”
termination and, in accordance with such agreement, you terminate employment or
service for “good reason”) within two (2) years following the date of the Change
in Control. Your entitlement to a Final Award, and the amount and distribution
of any Final Award to which you become entitled, shall be governed by the terms
of Section 13(b) of the Plan; provided that distribution of any Final Award that
becomes payable as a result of your termination of employment shall be
distributed upon the earlier to occur of (1) the date distribution would
otherwise have been made if your employment had continued, or (2) six (6) months
following termination of your employment.  In addition, if you terminated
employment pursuant to Section 6 on account of death, disability or Retirement
prior to the occurrence of the Change in Control, the Final Award attributable
to your Performance Stock Right (or pro rated Performance Stock Right under
Section 6) with respect to any Performance Period that has not been completed as
of the date of the Change in Control shall be calculated as of the date of the
Change in Control at the target level of performance (or, if greater, the then
projected Final Award level). Distribution shall then be made upon the earlier
to occur (1) if the Change in Control constitutes a “change in control

 

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event” within the meaning of Internal Revenue Code Section 409A, as soon as
practicable (and not more than ninety (90) days) following the occurrence of
such change in control event, or (2) the date on which distribution otherwise
would have been made if the Change in Control did not occur. For purposes of
this Section, your employment or service will be considered terminated if the
Company determines that you have incurred a “separation from service” as such
term is defined for purposes of Section 409A of the Internal Revenue Code,
taking into account, in the case of an absence from service for disability, the
maximum leave periods permitted under Internal Revenue Code Section 409A for
disability leaves of absence. Notwithstanding anything in the Plan or this
Agreement to the contrary, if at the time of a Change in Control, or at any
other time, your Performance Stock Right is cancelled and converted to a cash
value, and if such cancellation and conversion occurs prior to the date on which
vested amounts are to be settled under this Agreement, the cash value of your
cancelled and converted Performance Stock Right will accrue interest equivalent
at the prime rate of interest from the cancellation and conversion date to the
distribution date.

 

8.             Tax Withholding. Upon the issuance of Common Stock pursuant to a
Final Award or at any other time deemed necessary or appropriate by the
Committee, the Company has the right and the authority to deduct or withhold
from any compensation payable to you an amount sufficient to satisfy its
withholding obligations under applicable tax laws or regulations. Alternatively,
the Company may require that you deliver to the Company at the time the Company
is obligated to withhold taxes such amount as the Company requires to meet its
withholding obligation under applicable tax laws or regulations. The Company may
also satisfy its withholding obligation, in whole or in part, by withholding (or
requiring that you sell and remit to the Company the sale proceeds with respect
to) a number of the shares of Common 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 withholding requirements are satisfied will be paid to you in
cash or will be applied as additional tax withholding.

 

9.             Miscellaneous.

 

(a)           You (or your legal representatives, the executor of your estate or
your heirs) shall not be deemed to be a shareholder of the Company with respect
to the Performance Stock Right until shares of Common 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 Right shall not be transferable by you;
provided that following your death, any Final Award made with respect to you
will be paid to your 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 your
last will and testament or as a result of the laws of intestate succession. In
addition, by accepting this award, you agree not to sell any shares of Common
Stock delivered to you in connection with this Agreement at a time when
applicable laws (including securities laws), Company or Affiliate policies or an
agreement between the Company and its underwriters or other terms and conditions
of the Plan prohibit a sale.

 

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(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 your employment at any time nor confer upon you any
right to continue in the employ of the Company or any Affiliate.

 

(d)           As a condition of the granting of a Performance Stock Right under
this Agreement, you agree, for yourself and your legal representatives or
guardians, the executor of your estate, and your 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. Neither you, your legal
representatives, the executor of your estate or your heirs shall challenge or
dispute the Committee’s decisions.

 

(e)           The existence of this Agreement or the Performance Stock Right
herein granted shall not affect in any way the right or power of the Company or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company’s capital structure or its
business, or any merger or consolidation of the Company, or any issuance of
bonds, debentures, preferred, or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceeding, whether of a similar character or
otherwise.

 

(f)            The Committee may modify the Performance Stock Right at any time.
However, no modification, extension or renewal shall (1) confer on you any right
or benefit which you would not be entitled to if a new Performance Stock Right
were granted under the Plan at such time or (2) alter, impair or adversely
affect the Performance Stock Right or this Agreement without your written
consent; provided that the Committee need not obtain your written consent for a
modification of the Performance Stock Right to the extent that the Plan
specifically permits the Committee action or to the extent that the Committee
deems such modification necessary to comply with any applicable law, the listing
requirements of any principal securities exchange or market on which the shares
underlying the Performance Stock Right are then traded, or to preserve favorable
accounting or tax treatment of the Performance Stock Right for the Company; and
provided further, that unless the Committee determines that a Performance Stock
Right is not intended to comply with the requirements of Section 162(m) of the
Internal Revenue Code, the Committee shall not take any such action with respect
to you if you are a Covered Executive (as defined in the Plan) if such action
would cause any Final Award granted to you to cease to qualify as “qualified
performance-based compensation” for purposes of Section 162(m) of the Internal
Revenue Code.

 

(g)           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.

 

(h)           This Agreement may be executed in counterparts.

 

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(i)            As a condition of the granting of a Performance Stock Right under
this Agreement, you agree, for yourself and your legal representatives or
guardians, the executor of your estate, and your heirs, that the Performance
Stock Right and any Stock issued or cash paid pursuant to the Performance Stock
Right shall be subject to any recoupment or clawback policy that may be adopted
by the Company from time to time and to any requirement of applicable law,
regulation or listing standard that requires the Company to recoup or claw back
compensation paid pursuant to the Performance Stock Right.

 

10.          Governing Law. This Agreement shall be governed by the internal
laws of the State of Illinois, without regard to the principle of conflict of
laws, 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 (or reasonably should have 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, or Cook County, Illinois, 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.  Such action or other legal proceeding shall be heard
pursuant to a bench trial, and 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.

 

 

INTEGRYS ENERGY GROUP, INC.

 

 

 

 

 

By:

 

 

Title:

Vice President — Human Resources

 

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