Exhibit 10.3
July 7, 1999
C O N F I D E N T I A L
VIA FEDERAL EXPRESS
July 7, 1999
Charles R. Cole
(Home Address)
Dear Charlie:
This letter will confirm our offer of employment to you, with
the specifics to be as follows:
a. Position: You will be employed as Vice President,
Distribution Operations. You will report to Dave Porter, in
his capacity as Senior Vice President of the Company.
b. Base Salary: Base salary will be payable to you at the
rate of One Hundred and Eighty Thousand Dollars ($180,000) per
year, payable in accordance with the Company's regular payroll
practices.
c. Special Signing Bonus: As a special inducement, we will
pay you a special signing bonus of Twenty Five Thousand Dollars
($25,000) promptly after you report for work with us.
d. Moving Expenses and Temporary Living Expenses: The
Company will pay or reimburse you for your reasonable moving
costs in accordance with standard Company policy.
e. Other Benefits: You will be entitled to participate in
all applicable retirement and savings plans and all welfare
benefit plans and practices which the Company makes available
to its salaried employees generally. In addition:
o You will participate in the Wisconsin Energy Corporation
short-term incentive plan at a target award level of 40 percent
of your base salary.
o You will participate in the Wisconsin Energy Corporation
long-term incentive plan. Subject to the approval by the
Compensation Committee of the Board of Directors, you will be
placed in award category `C.' The previous (1999) awards at
that level were an option to purchase 10,000 shares of WEC
common stock at fair market value at time of award, plus 2,000
shares of restricted stock.
o You will participate in the Wisconsin Energy Corporation
Supplemental Executive Retirement Plan with respect to monthly
benefits "A" and "B." Monthly benefit "A" is designed to make
up for any limitations imposed on the amount of your accrued
benefit under the Company's tax-qualified defined benefit plan
(the "Retirement Account Plan") upon your retirement at or
after age 60, because of benefit limits under Section 415 of
the Internal Revenue Code or the limit on annual compensation
imposed by Section 401(a)(17) of such Code. Monthly benefit
"B" is a special supplemental pension benefit equal to a life
annuity of 10% of your average total compensation during your
highest 36 consecutive months, which will become available to
you on your retirement at or after age 60.
o You will participate in the executive deferred
compensation plan, which allows deferral of a portion of base
salary and performance awards into a nonqualified fund.
o You will be eligible to take up to 5 weeks of vacation
annually. Your vacation during the balance of 1999 will be pro-
rated.
o You will participate in a split dollar life insurance
program at 3 times your base salary.
o You will be eligible for a financial planning benefit of
$4,000 in the first year and every fifth year thereafter, and
$2,500 in intervening years.
o You will also participate on a basis commensurate with
other senior executives of the Company in any other executive
benefits, which currently include an annual physical
examination by a physician or clinic of your choice, travel and
accident insurance, and various perquisites.
6. Special Deferred Compensation Benefit: The Company agrees
to create a special bookkeeping account (the "Account") and to
credit the same with Two Hundred and Fifty Thousand Dollars
($250,000) as of August 1, 1999. This amount will be adjusted
as of December 31, 1999 with a pro rata share of investment
results and annually thereafter as of December 31 of each year
with annual investment results. Investment results will be the
same as would have been credited to the Account had it been
invested as a part of the funds of the Company's tax-qualified
defined benefit plan, the Retirement Account Plan. The current
value recorded in the Account will become payable to you in a
single lump sum, less applicable withholding, on the first to
occur of any of the following events:
a) Your termination of employment for any reason at any time
on or after age 60 (the "Vesting Date").
b) Your termination of employment at any time prior to the
Vesting Date because of death or such disability as prevents
you from continuing to substantially perform the duties of your
job.
c) The Company's termination of your employment at any time
prior to the Vesting Date without "Cause." "Cause" shall mean
any willful and continued failure on your part to substantially
perform the duties of your job, or any willful act of
misconduct or dishonest act by you involving the Company.
Should you voluntarily terminate your employment prior to
the Vesting Date or should the Company terminate your
employment for Cause prior to the Vesting Date, you will
forfeit any interest in the Account. Values held in the
Account or which become payable to you from the Account
will not be included or taken into consideration in the
calculation of any benefits due you under any other
retirement or welfare benefit plan or program of the
Company which bases benefits in whole or in part on
compensation.
The Account will be solely a bookkeeping reserve
established by the Company as a device for determining
amounts that may become payable to you and any right to
receive payments under this paragraph will be an unsecured
claim against the general assets of the Company. Any
claims for payments under this paragraph will be subject
to same claim procedure rules as apply to the Retirement
Account Plan.
You will have the right to name a beneficiary to receive
any benefits that may become payable under this paragraph
on your death, by filing a written notice with the Company
on a form prescribed by it. If you fail to designate a
beneficiary, any unpaid benefits due will be paid to your
estate.
__________________________________________
All benefits described above which are further defined in plan
documents are subject to all of the terms in those documents
which supersede any other description. Management reserves the
right in its discretion to change or terminate all current
benefit plans or practices and other policies and procedures.
Your employment would be considered at-will; that is, you could
be discharged for any reason or no reason at all, at any time
and without notice, and likewise, you may resign at any time
and without notice. This offer also requires successful
completion of a pre-employment drug screen.
This offer supersedes all prior discussions and will remain
open until July 15, 1999. We look forward to hearing from you
and hope that you will join us for what looks to be an exciting
future!
Sincerely,
/s/Richard R. Grigg
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Richard R. Grigg
President and Chief Operating Officer
Copy to: Richard Abdoo
Barbara Bras
Thomas Fehring/Lisa George