Document:

Exhibit 10(l)

 

SUMMARY
OF THE EMPIRE DISTRICT ELECTRIC COMPANY

ANNUAL
INCENTIVE PLAN

 

Our annual incentive plan is the
short-term component of our incentive compensation package.  Under this individualized annual plan, each
executive officer can earn additional cash compensation based on performance
measured against short-term tactical goals that lend support to our long-term
vision, goals and strategies. A set of metrics and corresponding performance
measures relevant to each executive’s area is developed from the broad
corporate goals and key business strategies at the beginning of the calendar
year.  One or more performance measures
are developed for each metric.  Each
performance measure is assigned a percentage weighting.  The weightings of each performance measure
sum up to 100%.  While corporate goals
and key business strategies have a long-term, multi-year perspective, the
metrics developed from them are short-term in perspective, focusing on the
operating conditions and circumstances of a particular year.  Each executive officer provides the President
and CEO a set of proposed metrics and performance measures for each new
calendar year.  The President and CEO
evaluates the proposed metrics and performance measures and makes any necessary
modifications.  The President and CEO
presents the proposed annual metrics and performance measures for himself and
all other executive officers to the Compensation Committee each new calendar
year.  The Compensation Committee reviews
his recommendations for consistency, measurability, and equity relative to
individual responsibilities and, together with their assessment of near-term
Company objectives, makes any necessary adjustments to individual annual
incentive plans before approving.

 

Once metrics, performance measures
and weightings are determined, total target Annual Cash Incentive amounts are
calculated for each executive officer with consideration given to our total
cash compensation philosophy.

 

Performance
levels above and below the target level of performance are also determined for
each performance measure.  A threshold
level of performance indicates a minimum (below target) level of expected
performance.  A maximum level of performance
indicates a higher (above target) level of expected performance.  Greater incentive compensation is payable if
the maximum level of performance is achieved. 
An incentive compensation award at the threshold level of performance is
equal to 50% of the target level award. 
At the maximum level of performance, the incentive compensation award is
equal to 200% of the target level award. 
When performance levels are between the threshold and maximum
performance levels, the amount of incentive compensation award is interpolated.  If an executive does not perform at least at
a threshold level of performance with regard to any particular individual
performance measure, no incentive compensation is awarded with respect to that
performance measure.

 

Each executive officer’s
performance against his/her individual annual incentive plan is reviewed by the
President and CEO with the Compensation Committee following the conclusion of
the calendar year.  The President and CEO
recommends incentive payments reflective of performance against each executive
officer’s individual annual incentive plan during the calendar year.  The Compensation Committee considers his
recommendations, makes any appropriate adjustments and determines the amount of
annual cash incentive earned by each executive. 
The Compensation Committee independently appraises the performance of
the President and CEO, and determines his incentive award accordingly.Exhibit 10(m)

 

February 13, 2008

 

	
  Name

  	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dear

  	
   

  	
  :

  	
   

  
						

 

The Empire
District Electric Company

2006 Stock Incentive Plan (the “Plan”)

 

Notice of Award of Dividend Equivalents

 

This is to advise you that
effective as of January 30, 2008 (the “Grant Date”), The Empire District
Electric Company (“the Company”) has granted to you dividend equivalents as set
forth in this Award (the “Dividend Equivalents”) subject to the conditions and
terms herein stated and the applicable terms and conditions of the Plan (copy
attached). The Dividend Equivalents covered by this Award relate to the
Non-Qualified Stock Option Award dated January 30, 2008 made to you under
the Plan (the “Related Option”) granting you the right to purchase ________ shares of Common Stock of the
Company (“Stock”) subject to the terms and conditions of that award and the
applicable terms and conditions of the Plan. 
This Award is intended to be a Restricted Stock Award within the meaning
of the Plan and constitutes a separate arrangement from the Related Option.

 

1.             Dividend Equivalents.  You are
hereby granted the right to receive a number of shares of Stock on the terms
and conditions hereinafter set forth. 
During the period from the Grant Date to the earlier of:  (i) the Conversion Date (as hereinafter
defined) or (ii) the date on which your employment terminates for any
reason, there shall be credited to an account (“Account”) established on the
books of the Company Dividend Equivalents in an amount equal to the dividends
that would have been payable to you if you owned the number of shares of Stock
covered by the Related Option.  No
interest or earnings will be credited on such Dividend Equivalents.  The “Conversion Date” shall be the earlier of
(i) January 30, 2011, or (ii) the date of a Change in Control of
the Company.  If your employment
terminates other than by reason of a Designated Termination (as defined in Section 12
below) before the Conversion Date, you will forfeit the entire amount credited
to your Account and will have no right to any benefits under this Award.  If you either (i) continue in employment
with the Company and its Subsidiaries through the Conversion Date or (ii) terminate
employment before the Conversion Date by reason of a Designated Termination (as
defined in Section 12 below), then as of the Conversion Date, your Account
will be converted into a number of shares of Stock determined by dividing the
amount credited to your Account by the Fair Market Value (as defined in the
Plan) of a share of Stock on the Conversion Date (disregarding fractions of a
share).

 

 

2.             Payment of Stock.  In the event of the conversion of your Account into shares of Stock
pursuant to the provisions of Section 1 above, a certificate for the
shares of Stock to which you become entitled will be delivered to you or, in
the event of your death, to the person or persons determined pursuant to Section 3
below, as of the Conversion Date.

 

3.             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.

 

4.             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.

 

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

 

6.             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 3
above.

 

7.             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.

 

8.             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.

 

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

 

10.          Unsecured Creditor.  Your rights with respect to the Award and the shares of Stock subject
thereto prior to the delivery of a certificate for shares of Stock pursuant to Section 2
above 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.

 

 

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)          Designated Termination.  “Designated
Termination” means 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.

 

(iv)          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.

 

(v)           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.

 

 

(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 Award of Dividend

  	
   

  
	
  Equivalents is hereby acknowledged. My

  	
   

  
	
  signed beneficiary designation form is attached.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

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