EXHIBIT 10(a)
DIRECTORS DEFERRED COMPENSATION PLAN
(As amended and restated October 3, 2006 as effective January 1, 2005, and amended December 6, 2006)
The Directors Deferred Compensation Plan (the “Plan”) was amended and restated effective April 7, 2004, a copy of which is attached as Exhibit A and which shall remain in effect for all amounts deferred, earned and vested prior to January 1, 2005, except as modified by the Supplement to this Plan dated as effective August 2, 2006, which is not intended to materially modify any deferred compensation plans of the Company that existed prior to October 4, 2004. The Plan was amended pursuant to the Agreement and Plan of Merger among WPS Resources Corporation (“WPS”), Wedge Acquisition Corporation and Peoples Energy Corporation dated as of July 8, 2006 (the “Merger Agreement”) on August 1, 2006 and August 2, 2006. The Plan was then amended and restated for amounts deferred, earned and vested after January 1, 2005 on October 3, 2006 and further amended on December 6, 2006 as follows:
The purpose of the Directors Deferred Compensation Plan (the “Plan”) is to attract and retain well-qualified persons who are not employees of Peoples Energy Corporation (the “Company”) or any of its subsidiaries for service as directors of the Company by providing such persons with the opportunity to defer, in cash and/or shares of the Company’s common stock, all or a portion of the compensation which they earn as directors of the Company.
The Board of Directors of the Company (the “Board”) shall have Authority to administer and interpret the provisions of the Plan and to prescribe forms and promulgate rules
and regulations with respect thereto. All determinations of the Board with respect to the Plan shall be final and binding upon all persons.
Directors of the Company who are not employees of the Company or any of its subsidiaries are eligible to participate in the Plan.
| 4. | Shares Available for Issuance |
Up to 200,000 authorized, but unissued shares of the Company’s common stock, without par value (the “Common Stock”) may be issued pursuant to the Plan. No shares of Common Stock shall be issued pursuant to this Plan prior to compliance with requirements under applicable laws and regulations. On and after the Effective Time (as defined in the Merger Agreement), for purposes of the share equivalents as described herein, Common Stock means the common stock of WPS Resources Corporation.
(a) An election to defer, or to cease to defer, compensation earned as a director of the Company shall be effective only with respect to compensation earned in the calendar year following the year in which the election is made, but in no event with respect to compensation earned within six months of the date on which the election is made; provided, however, that solely with respect to an election to defer in whole or in part the “Stock Payment” to be made May 1, 2000 under the Company’s Directors Stock and Option Plan, such election to defer may be made by a director delivering written notice thereof to the Company no later than March 31, 2000. An election to defer shall specify the form and timing of payment under the Plan. All elections shall be in writing and shall be made on such forms and in such manner as the Board may from time to time prescribe.
(b) An election shall be binding upon, and shall inure to the benefit of the heirs, legatees and personal representatives of the participant and the successors and assigns of the Company.
(c) Notwithstanding the foregoing, a participant may rescind a prior election to defer compensation earned as a director of the Company for the 2005 calendar year. Upon rescission, the compensation previously subject to the deferred election shall be payable to the participant as soon as administratively feasible after the date such amounts would otherwise be payable absent any deferral, but no later than March 15, 2006, and shall be treated as taxable income to the participant. The Plan shall not allow the rescission of any deferral elections, other than as provided for in this subparagraph 5(c).
(d) Notwithstanding the foregoing, a participant may make a new payment election on or before December 31, 2007, with respect to both the time and form of payment of amounts that are attributable to services performed on or after January 1, 2005 provided that:
(1) Elections made during calendar year 2006 may not apply to amounts that would be payable in 2006, and may not cause amounts to be paid in 2006 that would not otherwise be payable in 2006; and
(2) Elections made during calendar year 2007 may not apply to amounts that would be payable in 2007, and may not cause amounts to be paid in 2007 that would not otherwise be payable in 2007.
Such new payment elections shall at all times comply with Code Section 409A and the transition relief granted by IRS Notice 2006-79, and shall permit all rights granted thereby.
| 6. | Deferral of Compensation |
(a) Each participant may, with respect to cash compensation earned as a director of the Company, elect to have: (i) all or a portion of such compensation deferred and paid in cash in the manner set forth in subparagraphs 6(c) and 7(a) below and/or (ii) all or a portion of such compensation deferred and paid in shares of Common Stock in the manner set forth in subparagraphs 6(d) and 7(b) below. Additionally, each participant who elected to defer all or a portion of the “Stock Payments” deliverable prior to December 5, 2002, pursuant to the Company’s Directors Stock and Option Plan shall have such deferred amounts paid in the form of shares of Common Stock in the manner set forth in Paragraph 7 below, subject to the availability of shares of Common Stock for issuance under Paragraph 3 of the Directors Stock and Option Plan (as such shares may be adjusted pursuant to Paragraph 8 thereof), as modified, amended or supplemented from time to time.
(b) A bookkeeping account shall be established for each participant. The account shall reflect the amount of cash to which the participant is entitled in accordance with subparagraph 6(c) below and/or the number of share equivalents to which the participant is entitled in accordance with subparagraph 6(d) below.
(c) The account of a participant who elects to defer compensation in the form of cash shall be credited with the dollar amount of compensation so deferred on each date that the participant is entitled to payment for services as a director. Interest on the cash balance of the account shall be computed and credited quarterly on March 31, June 30, September 30 and December 31 of each year at the prime commercial rate as reported in the Wall Street Journal.
(d) The account of a participant who elects to defer compensation in the form of stock shall be credited with share equivalents on each date that the participant is entitled to a payment for services as a director. The number of share equivalents to be credited shall be
determined by dividing the amount of compensation so deferred by the mean price of a share of Common Stock on the New York Stock Exchange on the date that the participant is entitled to a payment for services as a director. Additional share equivalents shall be credited to the participant’s account on each date that the Company pays a dividend on the Common Stock. The number of additional share equivalents so credited shall be determined by dividing the dividend which would be paid on the number of shares of Common Stock equal to the number of share equivalents credited to the participant’s account as of the dividend record date by an amount equal to the mean price of a share of Common Stock on the New York Stock Exchange on the date which such dividend is paid to the Company’s shareholders. In determining the number of share equivalents to be credited to a participant’s account in accordance with this subparagraph 6(d), fractions of share equivalents shall be computed to three decimal places.
(a) Payment to the participant in the form of cash shall be made in a single payment on such date, or in such number of equal annual installments commencing on such date, as provided in the participant’s election.
(b) Payment to the participant in the form of shares of Common Stock shall be made in whole shares in a single payment on such date, or in such number of equal annual installments (or in installments as nearly equal as possible without the issuance of fractional shares) commencing on such date, as provided in the participant’s election. Any fractional share to which the participant is entitled as of date of the single payment or last installment shall be paid in cash.
(c) In the event of participant’s death, neither the participant nor any other person claiming under the participant shall have any right to the payment of any compensation
deferred under the Plan in advance of the schedule of payments as provided in the participant’s election except that:
(1) Any of the deferred compensation which shall not have been paid to the participant during his or her lifetime shall be paid to the participant’s spouse, if any, who shall survive the participant or to such person or persons other than such surviving spouse as the participant may designate in writing to receive the same. The participant shall have the right during his or her lifetime to designate and to change the designation of the person or persons to whom the Company shall make any payments of deferred compensation remaining unpaid at the death of the participant.
(2) In the event of the death of the participant prior to his or her receiving any deferred compensation, the single payment or installment payments provided for in subparagraph 7(c)(1) above shall be made or shall commence on the first day of the second month following the month in which the death of the participant occurred.
(3) Payments of deferred compensation required to be made to their surviving spouse of the participant of to such other persons or persons as the participant may have designated in writing to the Company to receive the same pursuant to subparagraph 7(c)(2) above shall be made in the same manner and, except as provided in subparagraph 7(c)(2) above, at the same time or times as such amount or amounts would have been paid to the participant’s election.
(4) If any amount of the deferred compensation shall remain unpaid upon the death of the last to survive of: (i) the participant; (ii) the participant’s spouse, unless a person or persons other than the spouse has been designated to receive the same, as provided in subparagraph 7(c)(1) above; or (iii) such other person or persons who may have been so
designated, the Company shall pay the aggregated amount thereof to the executor or administrator of the estate of the last to survive of the following:
| (ii) | the participant’s spouse, unless a person or persons other than the spouse has been designated as provided in subparagraph 7(c)(1) above; or |
| (iii) | any person theretofore receiving payments under a written designation as in this paragraph 7 provided. |
The words “person or persons” wherever they appear in this paragraph 7 are intended and shall be construed for all purposes to include the estate of the participant.
| 8. | No Right of Assignment or Acceleration |
The right of the participant, the participant’s spouse, or any other person designated to receive deferred compensation is personal and, except as provided in subparagraphs 7(c)(1) and 7(c)(2) above, is not subject to acceleration or assignment. The Company shall have no liability for the payment of any of the deferred compensation to any other person or in any other person or in any other manner than is provided in this Plan.
| 9. | Amendment or Discontinuance |
The Board may amend, rescind or terminate the Plan as it shall deem advisable; provided, however, that no change shall have a retroactive effect and no change shall be made with respect to compensation deferred under the Plan which would impair a participant’s rights to such compensation without his or her consent. Any such amendment, rescission or termination of the Plan shall not have the effect of accelerating the timing of any payments under the Plan.
This Plan and all determinations made actions taken pursuant hereto shall be governed by the laws of the State of Illinois pertaining to contracts made and to be performed wholly within such jurisdiction, except as federal law may apply.
| 11. | Adjustments Upon Changes in Capitalization |
In the event there is any change in the Common Stock of the Company through the declaration of stock dividends, or through recapitalization resulting in stock split-ups, or combinations or exchanges of shares, or otherwise, then the number of shares remaining available for issuance under the Plan shall be appropriately adjusted. Appropriately adjustment shall also be made to the number of shares to which a participant is entitled under the Plan. Pursuant to this Paragraph, the number of share equivalents of Company Common Stock existing and undistributed as of the Effective Time (as defined under the Merger Agreement) shall be converted at the Effective Time into share equivalents of WPS common stock by multiplying the number of share equivalents of Company common stock by 0.825 (rounded down to the nearest whole share).
This amendment and restatement of the Plan is effective October 3, 2006.
| 13. | Code Section 409A Compliance |
The Plan shall be administered in accordance with the requirements of Code Section 409A so that there will not be a plan failure under Code Section 409A(a)(1), and all amounts payable hereunder shall be distributed only in compliance with the requirements of paragraphs (2), (3) and (4) of such Code section. No distribution shall be made under the Agreement that would fail to meet the requirements of Code Section 409A. Alternatively, this Amendment and Restatement of the Plan is not intended to materially modify any deferred compensation plans of the Company that existed prior to October 4, 2004. However, if this Plan would otherwise be
interpreted to be a material modification of any deferred compensation plans of the Company that existed prior to October 4, 2004, as permitted by IRS Notice 2005-1, Q&A 18(b), this Plan shall be treated as material modification of such deferred compensation plans only as to the benefits provided by this Plan, and only the benefits provided by this Plan shall be subject to Code Section 409A.
DIRECTORS DEFERRED COMPENSATION PLAN
(As amended and restated, effective April 7, 2004)
1. Purpose
The purpose of the Directors Deferred Compensation Plan (the "Plan") is to attract and retain well-qualified persons who are not employees of Peoples Energy Corporation (the "Company") or any of its subsidiaries for service as directors of the Company by providing such persons with the opportunity to defer, in cash and/or shares of the Company's common stock, all or a portion of the compensation which they earn as directors of the Company.
2. Administration
The Board of Directors of the Company (the "Board") shall have Authority to administer and interpret the provisions of the Plan and to prescribe forms and promulgate rules and regulations with respect thereto. All determinations of the Board with respect to the Plan shall be final and binding upon all persons.
3. Eligibility
Directors of the Company who are not employees of the Company or any of its subsidiaries are eligible to participate in the Plan.
4. Shares Available for Issuance
Up to 200,000 authorized, but unissued shares of the Company's common stock, without par value (the "Common Stock") may be issued pursuant to the Plan. No shares of Common Stock shall be issued pursuant to this Plan prior to compliance with requirements under applicable laws and regulations.
5. Election to Defer
(a) An election to defer, or to cease to defer, compensation earned as a director of the Company shall be effective only with respect to compensation earned in the calendar year following the year in which the election is made, but in no event with respect to
compensation earned within six months of the date on which the election is made; provided, however, that solely with respect to an election to defer in whole or in part the "Stock Payment" to be made May 1, 2000 under the Company's Directors Stock and Option Plan, such election to defer may be made by a director delivering written notice thereof to the Company no later than March 31, 2000. An election to defer shall specify the form and timing of payment under the Plan. All elections shall be in writing and shall be made on such forms and in such manner as the Board may from time to time prescribe.
(b) An election shall be binding upon, and shall inure to the benefit of the heirs, legatees and personal representatives of the participant and the successors and assigns of the Company.
6. Deferral of Compensation
(a) Each participant may, with respect to cash compensation earned as a director of the Company, elect to have (i) all or a portion of such compensation deferred and paid in cash in the manner set forth in subparagraphs 6(c) and 6(d) below and/or (ii) all or a portion of such compensation deferred and paid in shares of Common Stock in the manner set forth in subparagraphs 6(e) and 6(f) below. Additionally, each participant who elected to defer all or a portion of the "Stock Payments" deliverable prior to December 5, 2002, pursuant to the Company's Directors Stock and Option Plan shall have such deferred amounts paid in the form of shares of Common Stock in the manner set forth in subparagraph 6(e) and 6(f) below, subject to the availability of shares of Common Stock for issuance under Paragraph 3 of the Directors Stock and Option Plan (as such shares may be adjusted pursuant to Paragraph 8 thereof), as modified, amended or supplemented from time to time.
(b) A bookkeeping account shall be established for each participant. The account shall reflect the amount of cash to which the participant is entitled in accordance with
subparagraph 6(c) below and/or the number of share equivalents to which the participant is entitled in accordance with subparagraph 6(e) below.
(c) The account of a participant who elects to defer compensation in the form of cash shall be credited with the dollar amount of compensation so deferred on each date that the participant is entitled to payment for services as a director. Interest on the cash balance of the account shall be computed and credited quarterly on March 31, June 30, September 30 and December 31 of each year at the prime commercial rate as reported in the Wall Street Journal.
(d) Payment to the participant in the form of cash shall be made in a single payment on such date, or in such number of equal annual installments commencing on such date, as provided in the participant's election.
(e) The account of a participant who elects to defer compensation in the form of stock shall be credited with share equivalents on each date that the participant is entitled to a payment for services as a director. The number of share equivalents to be credited shall be determined by dividing the amount of compensation so deferred by the mean price of a share of Common Stock on the New York Stock Exchange on the date that the participant is entitled to a payment for services as a director. Additional share equivalents shall be credited to the participant's account on each date that the Company pays a dividend on the Common Stock. The number of additional share equivalents so credited shall be determined by dividing the dividend which would be paid on the number of shares of Common Stock equal to the number of share equivalents credited to the participant's account as of the dividend record date by an amount equal to the mean price of a share of Common Stock on the New York Stock Exchange on the date which such dividend is paid to the Company's shareholders. In determining the number of share equivalents to be credited to a participant's account in accordance with this subparagraph 6(e), fractions of share equivalents shall be computed to three decimal places.
(f) Payment to the participant in the form of shares of Common Stock shall be made in whole shares in a single payment on such date, or in such number of equal annual installments (or in installments as nearly equal as possible without the issuance of fractional shares) commencing on such date, as provided in the participant's election. Any fractional share to which the participant is entitled as of date of the single payment or last installment shall be paid in cash.
7. Payment in the Event of Participant's Death
Neither the participant nor any other person claiming under the participant shall have any right to the payment of any compensation deferred under the Plan in advance of the schedule of payments as provided in the participant's election except that:
(a) Any of the deferred compensation which shall not have been paid to the participant during his or her lifetime shall be paid to the participant's spouse, if any, who shall survive the participant or to such person or persons other than such surviving spouse as the participant may designate in writing to receive the same. The participant shall have the right during his or her lifetime to designate and to change the designation of the person or persons to whom the Company shall make any payments of deferred compensation remaining unpaid at the death of the participant and to designate and to change the designation of the timing of such payments.
(b) In the event of the death of the participant prior to his or her receiving any deferred compensation, the single payment or installment payments provided for in subparagraph 7(a) above shall be made or shall commence on the first day of the second month following the month in which the death of the participant occurred.
(c) Payments of deferred compensation required to be made to their surviving spouse of the participant of to such other persons or persons as the participant may have
designated in writing to the Company to receive the same pursuant to subparagraphs 7(a) or 7(b) above shall be made in the same manner and, except as provided in subparagraph 7(b) above, at the same time or times as such amount or amounts would have been paid to the participant's election.
(d) If any amount of the deferred compensation shall remain unpaid upon the death of the last to survive of (i) the participant, (ii) the participant's spouse, unless a person or persons other than the spouse has been designated to receive the same, as provided in subparagraph 7(a) above, or (iii) such other person or persons who may have been so designated, the Company shall pay the aggregated amount thereof to the executor or administrator of the estate of the last to survive of the following:
| | (ii) | the participant's spouse, unless a person or persons other than the spouse has been designated as provided in subparagraph 7(a) above; or |
| | (iii) | any person theretofore receiving payments under a written designation as in this paragraph 7 provided. |
The words "person or persons" wherever they appear in this paragraph 7 are intended and shall be construed for all purposes to include the estate of the participant.
8. No Right of Assignment or Acceleration
The right of the participant, the participant's spouse, or any other person designated to receive deferred compensation is personal and, except as provided in subparagraphs 7(a) and 7(b) above, is not subject to acceleration or assignment. The Company shall have no liability for the payment of any of the deferred compensation to any other person or in any other person or in any other manner than is provided in this Plan.
9. Amendment or Discontinuance
The Board may amend, rescind or terminate the Plan as it shall deem advisable; provided, however, that no change shall have a retroactive effect and no change shall be made with respect to compensation deferred under the Plan which would impair a participant's rights to such compensation without his or her consent.
10. Governing Law
This Plan and all determinations made actions taken pursuant hereto shall be governed by the laws of the State of Illinois pertaining to contracts made and to be performed wholly within such jurisdiction, except as federal law may apply.
11. Adjustments Upon Changes in Capitalization
In the event there is any change in the Common Stock of the Company through the declaration of stock dividends, or through recapitalization resulting in stock split-ups, or combinations or exchanges of shares, or otherwise, then the number of shares remaining available for issuance under the Plan shall be appropriately adjusted. Appropriately adjustment shall also be made to the number of shares to which a participant is entitled under the Plan.
12. Effective Date
This amendment and restatement of the Plan is effective April 7, 2004.
SUPPLEMENT TO
DIRECTORS DEFERRED COMPENSATION PLAN
(As amended and restated, effective April 7, 2004)
(Supplement effective August 2, 2006)
The Plan as amended and restated, effective April 7, 2004 is now amended pursuant to the Agreement and Plan of Merger among WPS Resources Corporation (“WPS”), Wedge Acquisition Corporation and Peoples Energy Corporation dated as of July 8, 2006 (the “Merger Agreement”) on August 2, 2006 as follows:
1. Paragraph 4 shall read:
“Up to 200,000 authorized, but unissued shares of the Company’s common stock, without par value (the “Common Stock”) may be issued pursuant to the Plan. No shares of Common Stock shall be issued pursuant to this Plan prior to compliance with requirements under applicable laws and regulations. On and after the Effective Time (as defined in the merger agreement among WPS Resources Corporation, Wedge Acquisition Corporation and the Company dated July 8, 2006), for purposes of the share equivalents as described herein, Common Stock means the common stock of WPS Resources Corporation.”
2. The following language is added as the last sentence of Paragraph 11:
“Pursuant to this Paragraph, the number of share equivalents of Company Common Stock existing and undistributed as of the Effective Time (as defined in the merger agreement among WPS Resources Corporation, Wedge Acquisition Corporation and the Company dated July 8, 2006) shall be converted at the Effective Time into share equivalents of WPS common stock by multiplying the number of share equivalents of Company common stock by 0.825 (rounded down to the nearest whole share).”
