Document:

EXHIBIT 10(l)

 

March 2, 2006

 

Name

Address
1

Address
2

 

Dear
             :

 

The Empire District Electric Company

2006 Stock Incentive Plan
(the “Plan”)

 

Notice of Non-Qualified
Stock Option Award

 

This is to advise you that effective as of February 1,
2006 (the “Grant Date”), The Empire District Electric Company (“the Company”)
has granted to you an option (“Option”) under the Plan consisting of the right
to purchase          shares
of Common Stock of the Company (“Stock”) at an Option price of $22.23 per share,
subject to the conditions and terms herein stated and the applicable terms and
conditions of the Plan (copy attached).

 

This Option is not intended to be, and will not be
treated as, an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended.

 

1.             Exercisability. 
This Option shall vest and become exercisable on the earlier
of the third anniversary of the Grant Date or the date of a Change in Control
of the Company.  Thereafter, this Option
shall remain exercisable until the tenth anniversary of the Grant Date unless
sooner terminated pursuant to Section 2 below.

 

2.             Termination of Employment.  In
the event of the termination of your employment with the Company and its
Subsidiaries by reason of your death, Retirement, Disability, involuntary
termination by the Company and its Subsidiaries without Cause or voluntary
termination by you with the consent of the Committee, this Option, if not
already exercisable, shall become exercisable on the date determined pursuant
to the first sentence of Section 1 above and shall remain exercisable
until the tenth anniversary of the Grant Date. 
A termination of employment for any of the reasons specified in the
preceding sentence is hereinafter referred to as a “Designated Termination.”  In the event of the involuntary termination
of your employment by the Company and its Subsidiaries for Cause, this Option
shall terminate immediately upon such termination of employment.  In the event of the voluntary termination of
your employment by you without the consent of the Committee, this Option shall
terminate on the 30th day following such termination of employment, and shall
be exercisable prior to such termination only to the extent it has become exercisable, or becomes exercisable
during that 30-day period pursuant to the first sentence of Section 1
above.

 

3.             Exercise.  After
this Option becomes exercisable pursuant to Section 1 above and during the
period that this Option remains exercisable pursuant to Sections 1 and 2
above, this Option may be exercised in whole or in part by filing a written
notice with the Company.  The exercise
notice must specify the number of shares of Stock which you elect to purchase 

 

 

and must be accompanied by
payment of the Option price (including any applicable withholding taxes) for
such shares of Stock indicated by your election.  Payment of the Option price (and any
applicable withholding taxes) shall be made in cash or shares of Stock having a
Fair Market Value (as defined in the Plan) on the date of the exercise of this
Option equal to the Option price payable under this Option or a combination of
cash and shares of Stock, and no shares of Stock shall be issued upon exercise
of this Option until full payment has been made therefore.

 

4.             Heirs and Successors. 
This Award shall be binding upon, and inure to the benefit
of, the Company and its successors and assigns, and upon any person acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the Company’s assets and business.  If any of your rights or benefits
distributable to you under this Award have not been exercised or distributed,
respectively, at the time of your death, such rights shall be exercisable by
your Designated Beneficiary, and such benefits shall be distributed to your
Designated Beneficiary, in accordance with the provisions of this Award and the
Plan.  The “Designated Beneficiary” shall
be the beneficiary or beneficiaries designated by you in a writing filed with
the Committee in such form and at such time as the Committee shall require. If
you are deceased and failed to designate a beneficiary, or if the Designated
Beneficiary does not survive you, any rights that would have been exercisable
by you and any benefits distributable to you shall be exercised by or
distributed to the legal representative of your estate.  If you are deceased and have designated a
beneficiary and the Designated Beneficiary survives you but dies before the
Designated Beneficiary’s exercise of all rights under this Award or before the
complete distribution of benefits to the Designated Beneficiary under this
Award, then any rights that would have been exercisable by the Designated
Beneficiary shall be exercised by the legal representative of the estate of the
Designated Beneficiary, and any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative of the estate of
the Designated Beneficiary.

 

5.             Administration. 
The authority to manage and control the operation and
administration of this Award shall be vested in the Committee identified in the
Plan, and the Committee shall have all of the powers with respect to this Award
that it has with respect to the Plan. 
Any interpretation of this Award by the Committee and any decision made
by it with respect to this Award are final and binding on all persons.

 

6.             Amendment.  This
Award may be amended by written agreement between you and the Company, without
the consent of any other person.

 

7.             Nontransferability. 
This Award shall not be transferable except by will or the
laws of descent and distribution or by beneficiary designation in accordance
with Section 5 above and
shall be exercisable during your lifetime only by you.

 

8.             Taxes.  The
Company shall be entitled to withhold the amount of any withholding tax payable
with respect to the Option and to sell such number of shares of Stock as may be
necessary to produce the amount so required to be withheld, unless the
recipient supplies to the Company cash in the amount requested by the Company
for the purpose.

 

9.             Employee and Shareholder Status.  This Award does not constitute a
contract of continued service and does not give you the right to be retained as
an employee of the Company or any
of its Subsidiaries.  This Award does not confer upon you or any
other holder thereof any right as a shareholder of the Company prior to the
issuance of shares of Stock pursuant to the exercise of the Option.

 

 

10.           Plan Governs.  Notwithstanding anything in this Award to the
contrary, the terms of this Award shall be subject to the terms of the Plan.

 

11.           Rules Relating to Termination of Employment.  For purposes of this Award, the
date of termination of your employment shall be the first day occurring on or
after the Grant Date on which you are not employed by the Company or any
Subsidiary, regardless of the reason for the termination of employment; provided
that a termination of employment shall not be deemed to occur by reason of a
transfer of you between the Company and a Subsidiary or between two
Subsidiaries; and further provided that your employment shall not be considered
terminated while you are on a leave of absence from the Company or a Subsidiary
approved by your employer.  If, as a
result of a sale or other transaction, your employer ceases to be a Subsidiary
(and your employer is or becomes an entity that is separate from the Company),
and you are not, at the end of the 30-day period following the transaction,
employed by the Company or an entity that is then a Subsidiary, then, the
occurrence of such transaction shall be treated as the date of termination of
your employment caused by you being discharged by the employer.

 

12.           Definitions.  For
purposes of this Award, the terms used in this Award shall have the following
meanings:

 

(i)                    Cause.  A
termination of employment for “Cause” means any termination of your employment
by the Company or any of its Subsidiaries for (i) serious, willful
misconduct in respect of your obligations to the Company or its Subsidiaries,
which has caused demonstrable and serious injury to the Company or any of its
Subsidiaries, monetary or otherwise, as evidenced by a determination in a
binding and final judgment, order or decree of a court or administrative agency
of competent jurisdiction, in effect after exhaustion or lapse of all rights of
appeal, in an action, suit or proceeding, whether civil, criminal,
administrative or investigative; (ii) conviction of a felony, which has
caused demonstrable and serious injury to the Company or any of its Subsidiaries,
monetary or otherwise, as evidenced by a binding and final judgment, order, or
decree of a court of competent jurisdiction, in effect after exhaustion or
lapse of all rights of appeal; or (iii) your willful and continual failure
to substantially perform your duties for the Company or any of its Subsidiaries
(other than resulting from your incapacity due to physical or mental illness)
which failure continued for a period of at least thirty (30) days after a
written notice of demand for substantial performance has been delivered to you
specifying the manner in which you have failed to substantially perform.

 

(ii)                   Change in Control. 
A “Change in Control” of the Company shall mean “a change in
the ownership or effective control” of the Company, or “in the ownership of a
substantial portion of the assets” of the Company, within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended, and Treasury regulations and
Internal Revenue Service guidance thereunder.

 

(iii)                  Disability.   Except
as otherwise provided by the Committee, “Disability” means the determination by
the Committee, in its sole discretion, that a permanent and total disability
exists in accordance with uniform and non-discriminatory standards adopted by
the Committee from time to time.

 

(iv)                  Retirement.  “Retirement”
means your retirement on an “Early Retirement Date” or on or after your “Normal
Retirement Date,” as those terms are defined in The Empire District Electric
Company Employees’ Retirement Plan.

 

 

(v)                   Voting Securities. 
“Voting Securities” means any securities which carry the
right to vote generally in the election of directors.

 

(vi)                  Plan Definitions.  Except where the
context clearly implies or indicates the contrary, a word, term, or phrase used
in the Plan is similarly used in this Award.

 

Please acknowledge receipt of this Notice of Award
by signing and returning to the Secretary of the Company the enclosed copy
thereof, together with a completed and signed beneficiary designation form.

 

Very truly yours,

 

	
   

  	
   

  
	
   

  
	
  Chairman of
  the Plan Committee

  

 

Receipt
of the foregoing Notice of Non-Qualified

Stock Option Award is hereby acknowledged. 

My signed beneficiary designation form is attached.

 

 

	
   

  
	
  Name

  

 

 

	
   

  
	
  DateExhibit
10(m)

 

March 2, 2006

 

Name

Address
1

Address
2

 

Dear                     :

 

The Empire District Electric Company

2006 Stock Incentive Plan
(the “Plan”)

 

Notice of Performance-Based
Restricted Stock Award

 

This
is to advise you that effective as of February 1, 2006 (the “Grant Date”),
The Empire District Electric Company (“the Company”) has granted to you a
performance-based Restricted Stock Award (the “Award”) under the Plan
consisting of the right to receive the number of shares of Common Stock of the
Company (“Stock”) as set forth in Exhibit 1 attached hereto, subject to
the performance measures, forfeiture and other conditions and terms herein
stated and the applicable terms and conditions of the Plan (copy
attached).  This Award shall relate to the
Performance Period beginning on January 1, 2006 and ending on December 31,
2008 (the “Performance Period”).

 

1.             Settlement of Awards.  The Company shall deliver to you one share of
Stock for each Performance Share earned by you, as determined in accordance
with the provisions of Exhibit 1, which is attached to and forms a part of
this Award. The earned Performance Shares payable to you in accordance with the
provisions of this Section 1 shall be paid solely in shares of Stock.

 

2.             Time of Payment.  Except as otherwise
provided in this Award, payment of Performance Shares earned in accordance with
the provisions of Section 1 above will be delivered as soon as practicable
after the end of the Performance Period.

 

3.             Retirement, Disability, or Death During Performance
Period.  If your employment
with the Company and its Subsidiaries terminates during the Performance Period
because of your Retirement, Disability, or death, you shall be entitled to a
prorated number of the Performance Shares earned in accordance with Exhibit 1,
determined at the end of the Performance Period, and based on the ratio of the
number of months you were employed during the Performance Period (rounding a
fraction of a month to the next higher number of whole months) to the total
number of months in the Performance
Period. Fractional shares shall be disregarded.

 

4.             Termination of Employment During Performance
Period.  If your employment
with the Company and its Subsidiaries terminates during the Performance Period
for any reason other than your Retirement, Disability, or death, the
Performance Shares granted under this Award will be forfeited on the date of
such termination of employment; provided, however, that in such
circumstances, the Committee, in its sole discretion,
may determine that you will be entitled to receive a pro rata or other portion
of the Performance Shares.

 

 

5.             Change in Control.  If
a Change in Control of the Company occurs during the Performance Period, and
the date of termination of your employment does not fall before the Change in
Control date, you shall earn the Performance Shares that would have been earned
by you in accordance with Exhibit 1 as if performance at the Target for
the Performance Period had been achieved, but prorated based on the ratio of
the number of months you were employed during the Performance Period through
the date of the Change in Control (rounding a fraction of a month to the next
higher number of whole months), to the total number of months in the
Performance Period.  As soon as practicable
after the Change in Control, there shall be delivered to you one share of Stock
for each Performance Share so earned. 
Fractional shares shall be disregarded. 
As of the end of the Performance Period, the Committee shall determine
the number of Performance Shares, if any, that you earned pursuant to this
Award determined without regard to this Section 5, and there shall be
delivered to you one share of Stock for each Performance Share earned by you,
but reduced by the number of Performance Shares with respect to which payment
was previously made to you under this Section 5.  If the number of Performance Shares earned by
you as of the end of the Performance Period is less than the number of
Performance Shares with respect to which payment was previously made to you
under this Section 5, you shall not be required to repay any amounts to
the Company on account of such payment under this Section 5 for any reason, including failure to achieve the
Performance Measures.

 

6.             Heirs and Successors.  This
Award shall be binding upon, and inure to the benefit of, the Company and its
successors and assigns, and upon any person acquiring, whether by merger,
consolidation, purchase of assets or otherwise, all or substantially all of the
Company’s assets and business.  If any of
the benefits distributable to you under this Award have not been distributed at
the time of your death, such benefits shall be distributed to your Designated
Beneficiary, in accordance with the provisions of this Award and the Plan.  The “Designated Beneficiary” shall be the
beneficiary or beneficiaries designated by you in a writing filed with the
Committee in such form and at such time as the Committee shall require.  If you are deceased and failed to designate a
beneficiary, or if the Designated Beneficiary does not survive you, any
benefits distributable to you shall be distributed to the legal representative
of your estate.  If you are deceased and
have designated a beneficiary and the Designated Beneficiary survives you but
dies before the complete distribution of benefits to the Designated Beneficiary
under this Award, then any benefits distributable to the Designated Beneficiary
shall be distributed to the legal representative of the estate of the
Designated Beneficiary.

 

7.             Administration.  The authority to manage and control
the operation and administration of this Award shall be vested in the Committee
identified in the Plan, and the Committee shall have all of the powers with
respect to this Award that it has with respect to the Plan.  Any interpretation of the Award by the
Committee and any decision made by it with respect to the Award are final and
binding on all persons.

 

8.             Amendment.  This
Award may be amended by written agreement between you and the Company, without
the consent of any other person.

 

9.             Nontransferability. 
This Award shall not be transferable except by will or the
laws of descent and distribution or by beneficiary designation in accordance
with Section 6 above.

 

10.           Taxes.  The
Company shall be entitled to withhold the amount of any withholding tax payable
with respect to the Award and to sell such number of shares of Stock as may be
necessary to produce the amount so required to be withheld, unless the
recipient supplies to the Company cash in the amount requested by the Company
for the purpose.

 

 

11.           Employee and Shareholder Status.  This Award does not constitute a
contract of continued service and does not give you the right to be retained as
an employee of the Company or any of its Subsidiaries.  This Award does not confer upon you or any
other holder thereof any right as a shareholder of the Company prior to the
issuance of shares of Stock pursuant to this Award.

 

12.           Plan Governs.  Notwithstanding
anything in this Award to the contrary, the terms of this Award shall be
subject to the terms of the Plan.

 

13.           Unsecured Creditor. 
Your rights with respect to the Award and the shares of Stock
subject thereto during the Performance Period are those of an unsecured general
creditor of the Company.  No shares of
Stock or other specific property is or will be set apart in trust or otherwise
with respect to the Award but all of your rights in the Award will be evidenced
only by entries on the books of the Company unless and until shares of Stock
are actually issued to you, your beneficiary or your estate pursuant to the
Award.

 

14.           Rules Relating to Termination of Employment.  For purposes of this Award, the
date of termination of your employment shall be the first day occurring on or
after the Grant Date on which you are not employed by the Company or any
Subsidiary, regardless of the reason for the termination of employment;
provided that a termination of employment shall not be deemed to occur by
reason of a transfer of you between the Company and a Subsidiary or between two
Subsidiaries; and further provided that your employment shall not be considered
terminated while you are on a leave of absence from the Company or a Subsidiary
approved by your employer.  If, as a
result of a sale or other transaction, your employer ceases to be a Subsidiary
(and your employer is or becomes an entity that is separate from the Company),
and you are not, at the end of the 30-day period following the transaction,
employed by the Company or an entity that is then a Subsidiary, then, the occurrence
of such transaction shall be treated as the date of termination of your
employment caused by you being discharged by the employer.

 

15.           Definitions.  For
purposes of this Award, the terms used in this Award shall have the following
meanings:

 

(i)                            Change in Control. 
A “Change in Control” of the Company shall mean “a change in
the ownership or effective control” of the Company, or “in the ownership of a
substantial portion of the assets” of the Company, within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended, and Treasury regulations and
Internal Revenue Service guidance thereunder.

 

(ii)                           Disability.   Except as otherwise
provided by the Committee, “Disability” means the determination by the
Committee, in its sole discretion, that a permanent and total disability exists
in accordance with uniform and non-discriminatory standards adopted by the
Committee from time to time.

 

(iii)                          Retirement.  “Retirement”
means your retirement on an “Early Retirement Date” or on or after your “Normal
Retirement Date,” as those terms are defined in The Empire District Electric
Company Employees’ Retirement Plan.

 

(iv)                          Voting Securities. 
“Voting Securities” means any securities which carry the
right to vote generally in the election of directors.

 

(v)                           Plan Definitions.  Except where the context clearly implies or
indicates the contrary, a word, term, or phrase used in the Plan is similarly
used in this Award.

 

 

Please acknowledge receipt of this Notice of Award
by signing and returning to the Secretary of the Company the enclosed copy
thereof, together with a completed and signed beneficiary designation form.

 

Very truly yours,

 

	
   

  	
   

  
	
   

  
	
  Chairman of the Plan Committee

  

 

Receipt
of the foregoing Notice of

Performance-Based
Restricted Stock Award is

hereby
acknowledged.  My signed beneficiary

designation
form is attached.

 

 

	
   

  	
   

  
	
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  

 

 

EXHIBIT 1

 

PERFORMANCE MEASURES

 

1.             Purpose.  The purpose of this Exhibit 1 is to set
forth the Performance Measures that will be applied to determine the amount of
the award to be made under the terms of the attached performance-based
Restricted Stock Award (the “Award”). 
This Exhibit 1 is incorporated into and forms a part of the Award.

 

2.             Revision of Performance
Measures.  The Performance
Measures set forth in this Exhibit 1 may be modified by the Committee
during, or after the end of, the Performance Period to reflect significant
events that occur during the Performance Period that may have a substantial
effect on the application of the Performance Measure.  No modification shall be permitted pursuant
to this Section 2 that would cause the award to be deferred compensation
subject to inclusion in income and penalties under Section 409A(a)(1) of
the Internal Revenue Code of 1986, as amended.

 

3.             Performance Goals.  The Performance Measure for the Award is the
percentile ranking of the Company’s “Total Shareholder Return” for the
Performance Period (share price appreciation plus dividends over beginning
share price) as measured against the “Total Shareholder Return” for the
attached peer group of companies for the same period, and specified below:

 

(i)                    “Threshold” – equal
to the 20th percentile level of the peer group of companies;

 

(ii)                   “Target” – equal to
the 50th percentile level of the peer group of companies; and

 

(iii)                  “Maximum” – equal to
the 80th percentile level of the peer group of companies.

 

4.             Amount of Award.  The number of shares of Stock distributable
to you under the Agreement shall be determined in accordance with the following
schedule:

 

5.             Number of Performance
Shares.  For Company
performance against plan metrics, the number of Performance Shares of Stock
granted shall be as follows:

 

(i)                    For performance at
Threshold,              
shares;

 

(ii)                   For performance at Target,              shares;

 

(iii)                  For performance at Maximum,               shares;
and

 

(iv)                  The “Number of Performance
Shares” shall be interpolated to account for performance that falls between
Threshold, Target and Maximum.

 

Fractional shares shall be disregarded.

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