Form of WPS Resources Corporation Performance Stock Right Agreement


    
    

    Exhibit
      10.2

    


    WPS
      RESOURCES CORPORATION

    PERFORMANCE
      STOCK RIGHT AGREEMENT

    


    THIS
      AGREEMENT is
      entered into as of December 7, 2005, (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 2005 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 7, the period from January 1, 2006 to December 31,
      2008.

     

    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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (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 major
      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 

     

    
      
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    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. Except with respect to the
      portion (if any) of the Final Award payment of which is deferred in accordance
      with the WPS Resources Corporation Deferred Compensation Plan, the Final Award
      will be distributed to the Participant by March 15 of the calendar year
      following the calendar year in which the Performance Period ends, or as soon
      thereafter as is administratively practicable.

     

    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 be eligible to receive a
      Final Award, determined in accordance with Section 4 and this Section 6(b)
      following the conclusion of the Performance Period, if: (i) the Participant’s
      termination of employment is on account of death or disability (as defined
      in
      the Company’s long-term disability plan), or (ii) the Participant terminates
      employment on or after December 31 of the calendar year in which the Performance
      Period began and such termination is on account of retirement on or after age
      fifty-five. Except with respect to the portion (if any) of the Final Award
      payment of which is deferred in accordance with the WPS Resources Corporation
      Deferred Compensation Plan, the Final Award will be distributed to the
      Participant by March 15 of the calendar year following the calendar year in
      which the Performance Period ends, or as soon thereafter as is administratively
      practicable.

     

    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. Distribution will be made
      as
      soon as is administratively practicable following the Change of Control;
      provided, that if distribution following the Change of Control would result
      in
      the Participant being subject to imposition of an additional tax under Code
      Section 409A, distribution of the Final Award will be made (without interest)
      as
      soon as administratively practicable following the earlier to occur of (i)
      the
      date on which the Participant separates from the service of the Company and
      all
      affiliates (six months following the date of 

     

    
      
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    separation
      if
      Participant qualifies as a “key employee” as that term is defined for purposes
      of Section 409A of the Internal Revenue Code), or (ii) the date that
      distribution would otherwise have been made under Section 4 had the Change
      of
      Control not occurred. 

     

    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.

     

    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; 

     

    
      
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    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 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

    


    


    
      
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    ACKNOWLEDGEMENT
      FORM

    


    


    I
      have read the
      terms of the WPS Resources Corporation Performance Stock Right Agreement, dated
      December 7, 2005, 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.