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EXHIBIT 10.1
DQE, INC.
1996 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
Article I. Purpose and Adoption of the Plan
1.01 Purpose. The purpose of the DQE, Inc. 1996 Stock Plan for Non-
Employee Directors is to provide a vehicle for the replacement of the
Corporation's Outside Directors' Retirement Plan, to increase the ownership
interest in the Corporation of Non-Employee Directors whose services are
considered essential to the Corporation's continued progress, to align such
interests with those of the shareholders of the Corporation and to provide a
further incentive to serve as a Director of the Corporation.
Article II. Definitions
For purposes of this Plan, the capitalized terms set forth below shall have
the following meanings:
2.01 Board means the Board of Directors of the Corporation.
2.02 Committee means the Compensation Committee of the Board or such
other committee of the Board as the Board may designate.
2.03 Corporation means DQE, Inc., a Pennsylvania corporation, and its
successors and assigns.
2.04 Date of Grant means the date as of which an award of shares of
Stock are granted in accordance with Section 5.01.
2.05 Director means a member of the Board.
2.06 Disability means any physical or mental injury or disease of a
permanent nature which renders a Participant incapable of meeting the
requirements of service as a Director. The determination of whether a
Participant is disabled shall be made by the Committee in its sole and absolute
discretion.
2.07 Effective Date means December 31, 1996.
2.08 Existing Non-Employee Director means a Non-Employee Director who
was a Director on the Effective Date.
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2.09 Fair Market Value means, so long as the Stock is listed on the
New York Stock Exchange, the mean between the highest and lowest sales prices
per share of the Stock as quoted in the NYSE-Composite Transactions listing in
The Wall Street Journal (or such other reliable publication as the Board, in its
discretion, may determine to rely upon) for the date as of which fair market
value is to be determined. If there are no sales on such date, then fair market
value shall be determined by taking a weighted average of the mean between the
highest and lowest selling prices per share of the Stock as so quoted on the
nearest date before and the nearest date after the date as of which fair market
value is to be determined on which there are sales. The average should be
weighted inversely by the respective numbers of days between the selling dates
and the date as of which fair market value is to be determined. If the Stock is
not listed on the New York Stock Exchange on the date as of which fair market
value is to be determined, the Board shall in good faith determine the fair
market value of the Stock on such date. Fair market value shall be determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.
2.10 Initial Service Date means the date on which a Participant is
first elected or appointed a Non-Employee Director. The Initial Service Date may
be prior to the Effective Date.
2.11 New Non-Employee Director means a Non-Employee Director whose
Initial Service Date occurs after the Effective Date.
2.12 Non-Employee Director means a Director who is not an employee of
the Corporation or any subsidiary thereof.
2.13 Participant means any person eligible, pursuant to Section 3.02,
to participate under the Plan.
2.14 Plan means the DQE, Inc. 1996 Stock Plan for Non-Employee
Directors, as the same may be amended from time to time.
2.15 Restricted Stock means shares of Stock awarded to a Participant
subject to the restrictions as described in Sections 5.02 and 5.03.
2.16 Retirement means a Director's mandatory retirement pursuant to
the then-existing retirement policy of the Board.
2.17 Stock means the common stock, no par value, of the Corporation.
2.18 Vested Stock means shares of Stock awarded to a Participant not
subject to the restrictions described in Sections 5.02 and 5.03 (other than the
restrictions imposed by law).
Article III. Administration and Participation
3.01 Administration. The Plan shall be administered by the Committee
which shall have exclusive and final authority and discretion in each
determination, interpretation or other action affecting the Plan and its
Participants. The Committee shall have the sole and absolute authority and
discretion to interpret the Plan, to establish and modify administrative rules
for the
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Plan, to impose such conditions and restrictions as it determines appropriate
and to take such other actions and make such other determinations in connection
with the Plan as it may deem necessary or advisable. Members of the Committee
shall not be liable for actions taken by the Committee in good faith.
3.02 Eligibility. All Non-Employee Directors shall participate in the
Plan.
Article IV. Stock Issuable under the Plan
4.01 Source of Shares. The Stock to be offered under the Plan shall be
authorized and unissued Stock, subject to the applicable requirements of the New
York Stock Exchange, or Stock which shall have been reacquired by the
Corporation and held in its treasury.
4.02 Shares Subject to Terminated Awards. Shares of Restricted Stock
forfeited as provided in Section 5.03(b) may again be issued under the Plan.
Article V. Stock Awards
5.01 Stock Grants and Issuance of Shares.
(a) Existing Non-Employee Directors. As of the Effective Date,
each Existing Non-Employee Director shall receive, automatically and without
further action by the Board or the Committee, a one-time award of cash, shares
of Restricted Stock and shares of Vested Stock in the amounts reflected in
Schedule A.
(b) New Non-Employee Directors. Subject to Section 7.02, each
New Non- Employee Director shall receive as of his or her Initial Service Date,
automatically and without further action by the Board or the Committee, a one-
time award of Restricted Stock in respect of 4,150 shares of Stock; provided,
however, that a New Non-Employee Director shall receive a pro-rated award if his
or her Initial Service Date occurs within ten (10) years of his or her
anticipated Retirement date.
(c) Issuance of Stock. As of the Date of Grant of Stock, the
Corporation shall cause to be transferred on the books of the Corporation shares
of Stock, registered on behalf of the Participant, evidencing such award, but
subject to forfeiture retroactive to the Date of Grant if a Stock Plan Agreement
delivered to the Participant by the Corporation with respect to the award is not
duly executed by the Participant and timely returned to the Corporation. If
stock certificates are issued with respect to an award of Stock, until the lapse
of all restrictions applicable to an award of Restricted Stock, such stock
certificates may be held in custody by the Corporation or its designee.
5.02 Restrictions on Restricted Stock.
(a) Shareholder Rights. The Participant shall be the outright
owner of Vested Stock from and after the Date of Grant thereof, subject only to
such restrictions as may be imposed by law and the execution of a Stock Plan
Agreement as provided in Section 5.02(a).
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Restricted Stock shall be subject to the additional restrictions and other
provisions set forth in this Section 5.02 and Section 5.03 hereof. Beginning on
the Date of Grant of the Restricted Stock, but subject to the execution of a
Stock Plan Agreement as provided in Section 5.02(a), the Participant shall
become a shareholder of the Corporation with respect to all Stock subject to the
Plan and shall have all of the rights of a shareholder, including, but not
limited to, the right to vote such Stock and the right to receive dividends and
other distributions paid with respect to such Stock; provided, however, that all
dividends on Restricted Stock payable during the restriction period shall be
subject to the provisions hereinafter set forth. As a condition of receiving an
award under this Plan, each Non-Employee Director shall irrevocably and
unconditionally assign to the Corporation any and all cash and non-cash
dividends and other distributions paid with respect to the Restricted Stock
during the restriction period; provided further, however, that any Stock
distributed as a dividend or otherwise with respect to the Restricted Stock
during the restriction period shall not be subject to such assignment, shall be
subject to the same restrictions as the Restricted Stock and shall be held as
prescribed in Section 5.02(a). Within thirty (30) days following the date of
lapse of the restrictions (other than by reason of forfeiture) with respect to
all or any portion of the Restricted Stock, the Corporation shall pay to the
Participant in cash an amount equal to the value of all of the dividends which
were payable with respect to such shares during the restriction period.
(b) Restriction on Transferability. None of the Restricted Stock
may be assigned, transferred (other than by will or the laws of descent and
distribution), pledged, sold or otherwise disposed of prior to lapse of the
restrictions applicable thereto.
(c) Delivery of Stock Upon Lapse of Restrictions. As promptly as
administratively feasible after the lapse of restrictions on Restricted Stock,
the Corporation shall deliver to the Participant or, in case of the
Participant's death, to the Participant's legal representatives, one or more
stock certificates for the appropriate number of shares of Stock, free of all
such restrictions, except for any restrictions that may be imposed by law.
5.03 Restriction Period, Vesting and Forfeiture of Restricted Stock.
(a) Lapse of Restrictions (Vesting). The restrictions set forth
in Section 5.02 shall apply for a period from the Date of Grant until (i) with
respect to ten percent (10%) of the Restricted Stock, the first anniversary of
the Participant's Initial Service Date, (ii) with respect to an additional ten
percent (10%) of the Restricted Stock, for a cumulative total of twenty percent
(20%) of the Restricted Stock, the second anniversary of the Participant's
Initial Service Date, (iii) with respect to an additional ten percent (10%) of
the Restricted Stock, for a cumulative total of thirty percent (30%) of the
Restricted Stock, the third anniversary of the Participant's Initial Service
Date, (iv) with respect to an additional ten percent (10%) of the Restricted
Stock, for a cumulative total of forty percent (40%) of the Restricted Stock,
the fourth anniversary of the Participant's Initial Service Date, (v) with
respect to an additional ten percent (10%) of the Restricted Stock, for a
cumulative total of fifty percent (50%) of the Restricted Stock, the fifth
anniversary of the Participant's Initial Service Date, (vi) with respect to an
additional ten percent (10%) of the Restricted Stock, for a cumulative total of
sixty percent (60%) of the Restricted Stock, the sixth anniversary of the
Participant's Initial Service Date, (vii) with respect to an additional ten
percent (10%) of the Restricted Stock, for a cumulative total of seventy percent
(70%) of the Restricted Stock, the seventh anniversary of the Participant's
Initial Service Date, (viii) with respect to an additional ten percent (10%) of
the
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Restricted Stock, for a cumulative total of eighty percent (80%) of the
Restricted Stock, the eighth anniversary of the Participant's Initial Service
Date, (ix) with respect to an additional ten percent (10%) of the Restricted
Stock, for a cumulative total of ninety percent (90%) of the Restricted Stock,
the ninth anniversary of the Participant's Initial Service Date, and (x) with
respect to the balance of the Restricted Stock, the tenth anniversary of the
Participant's Initial Service Date. Notwithstanding the foregoing, the vesting
schedule with respect to Existing Non-Employee Directors shall be adjusted
appropriately to take account of the fact that a portion of their award consists
of cash and Vested Stock. In applying the foregoing vesting schedule, any
fractional share shall be rounded up to the next highest whole share. Existing
Non-Employee Directors, but not New Non-Employee Directors, shall have the right
to elect in writing upon the vesting of any Restricted Stock to surrender one-
half (1/2) of such vested Restricted Stock and receive in lieu thereof a cash
payment equal to the Fair Market Value of such surrendered shares determined as
of the vesting date.
(b) Forfeiture of Restricted Stock. Subject to the last two
sentences of this Section 5.03(b), all Restricted Stock with respect to which
the restriction period shall not have previously lapsed in accordance with
Section 5.03(a) shall be forfeited and returned to the Corporation, and all
rights of the Participant with respect to such Restricted Stock shall cease and
terminate in their entirety, if during the restriction period the service of the
Participant as a Director terminates for any reason. Notwithstanding the
foregoing, in the event of the cessation of a Participant's service as a
Director by reason of death, Disability or Retirement, all restrictions imposed
on Restricted Stock, other than those imposed by applicable law, shall
immediately and fully lapse.
Article VI. Amendment and Termination of the Plan
6.01 Amendment. The Board shall have complete power and authority to
amend the Plan at any time it deems necessary or appropriate. No termination
or amendment of the Plan may, without the consent of the Participant to whom any
award shall theretofore have been granted under the Plan, adversely affect the
right of such individual under such award.
6.02 Termination. The Board shall have the right and the power to
terminate the Plan at any time. No award shall be granted under the Plan after
the termination of the Plan, but the termination of the Plan shall not have any
other effect and any award outstanding at the time of the termination of the
Plan and shall continue in effect in accordance with its terms as if the Plan
has not terminated.
Article VII. Miscellaneous
7.01 Limitations on Transfer. The rights and interest of a Participant
under the Plan may not be assigned or transferred other than by will or the laws
of descent and distribution. During the lifetime of a Participant, only the
Participant personally may exercise rights under the Plan.
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7.02 Adjustments to Reflect Capital Changes. The number of shares of
Restricted Stock issuable to each New Non-Employee Director pursuant to Section
5.01(b) shall be appropriately adjusted to reflect any stock dividend, stock
split, combination or exchange of shares, merger, consolidation or other change
in capitalization with a similar substantive effect upon the Plan. The Committee
shall have the power and sole discretion to determine the nature and amount of
the adjustment, if any, to be made pursuant to this Section 7.02.
7.03 Notice. Every notice or other communication relating to this Plan
shall be in writing and shall be mailed to or delivered to the party for whom it
is intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided,
however, that unless and until some other address be so designated, all notices
or communications by the Participant to the Corporation shall be mailed or
delivered to the Corporation at its offices at 411 Seventh Avenue, Pittsburgh,
Pennsylvania 15230 and all notices or communications by the Corporation to the
Participant may be given to the Participant personally or may be mailed to him
or her at the Participant's address as reflected in the records of the
Corporation.
7.04 Governing Law. The Plan and all determinations made and actions
taken pursuant to the Plan shall be governed by the laws of the Commonwealth of
Pennsylvania other than the conflict of laws provisions of such laws, and shall
be construed in accordance therewith.
7.05 No Strict Construction. No rule of strict construction shall be
implied against the Corporation, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any award granted under the Plan
or any rule or procedure established by the Committee.
7.06 Captions. The captions (i.e., all Section and subsection
headings)used in the Plan are for convenience only, do not constitute a part of
the Plan, and shall not be deemed to limit, characterize or affect in any way
any provisions of the Plan, and all provisions of the Plan shall be construed as
if no captions had been used in the Plan.
7.07 Severability. Whenever possible, each provision in the Plan shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of the Plan shall be held to be prohibited by or invalid
under applicable law, then (a) such provision shall be deemed amended to
accomplish the objectives of the provision as originally written to the fullest
extent permitted by law and (b) all other provisions of the Plan shall remain in
full force and effect.
7.08 Legends. All certificates for Stock delivered under the Plan
shall be subject to such transfer restrictions set forth in the Plan and such
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Stock is then listed and any applicable
federal or state securities law, and the Committee may cause a legend or legends
to be endorsed on any such certificates making appropriate references to such
restrictions.
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SCHEDULE A
Grants to Existing Non-Employee Directors
Number of Shares of Number of Shares
Name Amount of Cash Restricted Stock of Vested Stock
---- ---------------- ------------------- ----------------
Daniel Berg 124,592 0 4,154
Doreen E. Boyce 120,713 0 4,024
Robert P. Bozzone 69,187 3,075 2,307
Sigo Falk 119,370 0 3,979
William H. Knoell 125,644 0 4,189
Robert Mehrabian 50,718 3,382 1,691
Thomas J. Murrin 47,790 3,186 1,593
Eric W. Springer 124,592 0 4,154
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ATTEST: DQE, INC.
/s/ Diane S. Eismont BY: /s/ David D. Marshall
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Secretary Title: President and Chief
Executive Officer
Effective December 31, 1996
