EXHIBIT 10.3
SENIOR OFFICER EMPLOYMENT AND NON-COMPETE AGREEMENT
THIS AGREEMENT is made as of June 20, 2003 between WISCONSIN
ENERGY CORPORATION (the "Company") and Allen Leverett (the
"Executive").
WHEREAS, the Company wishes to employ the Executive as its Chief
Financial Officer and the Executive wishes to accept such
employment on the terms and conditions provided in this
Agreement;
NOW, THEREFORE, in consideration of their mutual promises, the
parties agree as follows:
1. Defined Terms. All of the capitalized terms not otherwise
defined in this Agreement are defined in the attached Appendix.
2. Employment. Effective as of July 1, 2003 (the "Employment
Starting Date"), the Company employs the Executive as the Chief
Financial Officer and the Executive hereby accepts such
employment with the Company and agrees to serve in such position
and to perform such other executive duties and serve in such
other executive capacities not inconsistent with the position of
Chief Financial Officer as the Board of Directors of the Company
may request. The Executive's employment is not for any fixed
term and the Executive acknowledges that he is an employee
at-will. Further:
(a) Base Salary, Signing Bonus and Bonus Opportunity. Effective
as of the Employment Starting Date, the Executive's annual base
salary is hereby established at an annual rate of $460,000. The
Executive will receive a special lump sum signing bonus of
$250,000, with $150,000 of this amount payable promptly after the
Employment Starting Date and the balance of $100,000 payable six
months later, provided the Executive then remains in the
Company's employ. The Executive's target bonus opportunity for
2003 under the Company's Short-Term Performance Plan (the "STPP")
is fixed at 80% of base salary, with a minimum guaranteed bonus
of $368,000 for 2003 and a maximum bonus opportunity of 160% of
base salary. The Executive's target bonus opportunity under the
STPP for 2004 and subsequent years will not be less than 80% of
base salary, except under circumstances described in the next
sentence. Circumstances under which an adjustment below the 80%
target could take place would be limited to a general "Board
Action" resulting in the lowering of targets for the entire
senior executive group.
(b) Stock Based Incentives. Effective as of the Employment
Starting Date, the Executive will receive a grant of non-
qualified options for 200,000 shares of the Company's common
stock (the "Stock") at an exercise price per share equal to the
average of the lowest and highest reported sale prices for the
Stock on the Employment Starting Date, and on other terms and
conditions as specified for other senior officers in the grants
made to such officers in January of 2003. Additionally,
effective as of the Employment Starting Date, the Executive will
be granted an award of restricted stock, with the number of
shares awarded to be determined by dividing $750,000 by the lower
of the average of the lowest and highest reported sale prices for
the Stock on such date, or $26.00, and then rounding the number
of shares to the nearest 10. Two-thirds of such restricted stock
(rounded to the nearest whole share) will vest on the second
anniversary of the Employment Starting Date and the remainder
will vest at the rate of 20% for each year of service thereafter
(i.e., starting with second anniversary of the Employment
Starting Date) until 100% vesting of such remainder occurs on the
seventh anniversary of the Employment Starting Date, provided
further that 100% vesting of all such restricted Stock shall
occur upon the Executive's death or disability while in the
Company's employ.
3. Other Benefits and Special Additional Pension Benefit. The
Executive will be entitled to five weeks of vacation per year, to
participate in all retirement and welfare benefit plans and
programs generally available to employees in accordance with the
terms of such plans and programs and to participate on a basis
commensurate with other senior officers of the Company in any
benefit plans and programs available to such officers, including
the opportunity to participate in the Company's Executive
Deferred Compensation Plan (the "EDCP"). Additionally, the
Executive shall be entitled to (i) participate in the Company's
Supplemental Executive Retirement Plan (the "SERP") with respect
to monthly benefit "A," which is designed to make up for any
limitations imposed on the amount of Executive's accrued benefit
under the Company's tax-qualified defined benefit plan (the
"Retirement Account Plan") because of statutory or regulatory
limits relating to the Internal Revenue Code and shall vest in
monthly benefit "A" concurrent with vesting in the Retirement
Account Plan, and (ii) receive a special additional pension
benefit. Such special additional pension benefit, provided the
Executive's retirement occurs at or after age 60, will be equal
to the difference between (a) and (b) below, less the monthly
lifetime retirement benefits payable to the Executive from all
qualified and non-qualified defined benefit pension plans of
previous employers of the Executive, calculated as if starting on
the same date as the special additional pension benefit, where
(a) and (b) are as follows:
a) equals the monthly lifetime retirement benefit payable from
the Company's Retirement Account Plan, plus any amount payable
under the SERP monthly benefit "A", and
b) equals the monthly lifetime retirement benefit
that would have been payable from the Management
Employees' Retirement Plan of the Company as in
effect on December 31, 1995 (the "1995 Management
Plan") had the defined benefit formula then in
effect continued until the Executive's retirement,
calculated without regard to Internal Revenue Code
limits, and as if the Executive had started
participation in the 1995 Management Plan on
January 1, 1989 and as if any deferrals elected by
the Executive under the EDCP and any bonuses were
all included in the Executive's compensation base
for calculating benefits under the 1995
Management Plan.
4. Additional Preretirement Spouse's Benefit. In the event of
the Executive's death while in the Company's employ, the Company
will pay to the Executive's surviving spouse, if any, a monthly
benefit equal to the difference between (a) and (b) below, but
reduced as provided below to reflect the vested value of all
qualified and nonqualified defined benefit pension plans of
previous employers of the Executive, where (a) and (b) are as
follows:
a) equals the monthly spouse's benefit that is
payable from the Retirement Account Plan of the
Company, plus any amount payable under monthly
benefit "A" of the SERP, and
b) equals the monthly spouse's benefit that would
have been payable from the 1995 Management Plan
had the defined benefit formula in effect on
December 31, 1995 continued until the Executive's
death, calculated on all the same assumptions as
set forth in Section 3(b)above.
The reduction attributable to plans of previous
employers as referenced above in the event the
additional preretirement spouse's benefit becomes
payable is to be applied by reducing the monthly
surviving spouse benefit calculation as above set forth
by one-half of the dollar amount of offset attributable
to the plans of previous employers that would have
resulted under the third sentence of Section 3 above if
Section 3 were applicable.
5. Covered Termination Not Associated with a Change in Control.
In the event of a Covered Termination Not Associated with a
Change in Control, then the Company shall provide the Executive
with the following compensation and benefits:
a) General Compensation and Benefits. The Company shall pay
the Executive's full salary to the Executive from the time notice
of termination is given through the date of termination of
employment at the rate in effect at the time such notice is given
or, if higher, at an annual rate not less than twelve times the
Executive's highest monthly base salary for the twelve-month
period immediately preceding the month in which the Effective
Date occurs, together with all compensation and benefits payable
to the Executive through the date of termination of employment
under the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period. Such
payments shall be made in a lump sum not later than ten business
days after such termination. The Company shall also pay the
Executive's normal post-termination compensation and benefits to
the Executive as such payments become due, except that any normal
cash severance benefits shall be superseded and replaced entirely
by the benefits provided under this Agreement. Such
post-termination compensation and benefits shall be determined
under, and paid in accordance with, the Company's retirement,
insurance and other compensation or benefit plans, programs and
arrangements most favorable to the Executive in effect at any
time during the 180-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to
executives of the Company of comparable status and position to
the Executive.
b) Incentive Compensation. Notwithstanding any provision of
any cash bonus or incentive compensation plan of the Company, the
Company shall pay to the Executive, within ten business days
after the Executive's termination of employment, a lump sum
amount, in cash, equal to the sum of (i) any bonus or incentive
compensation which has been allocated or awarded to the Executive
for a fiscal year or other measuring period under the plan that
ends prior to the date of termination of employment, but which
has not yet been paid, and (ii) a pro rata portion of the Highest
Bonus Amount for all uncompleted periods under any bonus or
incentive compensation plan.
c) Special Compensation. The Company shall pay to the
Executive a lump sum equal to two times the sum of (a) the
highest per annum base rate of salary in effect with respect to
the Executive during the three-year period immediately prior to
the termination of employment plus (b) the Highest Bonus Amount.
Such lump sum shall be paid by the Company to the Executive
within ten business days after the Executive's termination of
employment, unless the provisions of Section 5 (f) below apply.
The amount of the aggregate lump sum provided by this Section 5
(c), whether paid immediately or deferred, shall not be counted
as compensation for purposes of any other benefit plan or program
applicable to the Executive.
d) Special Retirement Plans Lump Sum. The Company shall pay to
the Executive an aggregate lump sum equal to the total of the
amounts described in (a) and (b) herein. Amount (a) is a lump
sum equal to the difference between (i) the actuarial equivalent
of the benefit under the Retirement Account Plan, the SERP
monthly benefit "A" and the special additional pension benefit
provided under Section 3 above, which the Executive would receive
if his employment continued for a two-year period following
termination of employment, assuming that the Executive's
compensation during such two-year period would have been equal to
the Executive's salary as in effect immediately before the
termination or, if higher, as in effect at any time during the
180-day period immediately preceding the termination date, and
the Highest Bonus Amount, and (ii) the actuarial equivalent of
the Executive's actual benefit (paid or payable) under the
Retirement Account Plan, the SERP monthly benefit "A" and the
special additional pension benefit under Section 3 above.
Actuarial equivalency for this purpose shall be determined using
an interest rate equal to a 36 consecutive month (or shorter
period, as explained in the next sentence) average, using the
rates as of the last business day of each month starting with
January 31, 2002 (the "Month End Rate") of the five year United
States Treasury Note yields (the "36 Month Average Rate") in
effect ending with the Month End Rate immediately prior to the
Effective Date, as such yield is reported in the Wall Street
Journal or comparable publication, and the mortality table used
for purposes of determining lump sum amounts then in use under
the Retirement Account Plan. Prior to January 31, 2004, the 36
Month Average Rate shall mean only the average of the Month End
Rates which have occurred since January 31, 2002, even though
less than 36. Amount (b) is a lump sum equal to the total of (i)
the additional contributions which would have been made to the
Executive's account under the Company's tax-qualified 401(k)
plan, plus (ii) the additional contributions which would have
been credited to the bookkeeping account balance of the Executive
attributable to the 401(k) match feature of the EDCP, had the
Executive continued in employment for a two-year period following
termination of employment and assuming that the Executive's
compensation would have been the same as set forth above and that
the Executive had made maximum utilization of the pre-tax and
after-tax opportunity in the qualified 401(k) plan and obtained
the maximum matching contributions in such plan. The amount of
the aggregate lump sum under this Section 5(d) shall be paid by
the Company to the Executive within ten business days after the
Executive's termination of employment, unless the provisions of
Section 5(e) below apply. The amount of the lump sum provided by
this Section 5(d) shall not be treated as compensation for
purposes of any other benefit plan or program applicable to the
Executive.
e) Special Additional Monthly Pension Benefit. The Company
shall pay to the Executive an additional monthly pension benefit
equal to the difference between (i) the pension benefits the
Executive would have received under all qualified and non-
qualified defined benefit pension plans of his former employer
immediately prior to his employment with the Company had he
remained with such former employer until age 60, calculated as if
his pay with such employer had continued at its 2003 level,
increased by 3% annually thereafter, and (ii) the sum of the
pension benefits actually payable to the Executive under the
Retirement Account Plan and under Section 3 above, which will
become vested upon the Executive's termination under this Section
5 without regard to the Executive's age, plus the actuarial
equivalent (calculated as provided in subsection (d) above) of
the special retirement plans lump sum benefit provided in
subsection (d) above, provided that the benefit calculated under
(i) above is greater than the benefit calculated under (ii)
above.
f) Deferral Option. Notwithstanding any other provision of
this Agreement, the Executive may file a written irrevocable
deferral election form with the Company both prior to the
expiration of thirty days from the date this Agreement is signed
by the Executive and prior to the Executive's termination of
employment electing to defer all or part of the special
compensation provided by Section 5(c) and the special retirement
plans lump sum otherwise provided for in Section 5(d). Such form
shall irrevocably specify a method of payment for such
compensation from among the methods allowable under the EDCP.
Any deferred amounts shall be credited with earnings in the
manner as elected by the Executive under the terms of the EDCP
and the EDCP provisions shall apply to deferrals made hereunder
except that (i) any provisions for a mandatory lump sum payment
upon a "Change in Control" as defined in the EDCP shall not apply
to deferrals made hereunder, (ii) any amounts which become
payable under this Section 5(f) shall be deemed for purposes of
the EDCP to have become payable on account of the Executive's
"retirement," and (iii) the entire amount deferred under this
Section 5(f) shall be paid in a lump sum by the Company
immediately prior to the occurrence of a Change in Control to
such grantor or "rabbi" trust as the Company shall have
established as a vehicle to hold such amount pending payment, but
with such trust designed so that the Executive's rights to
payment of such benefits are no greater than those of an
unsecured creditor.
g) Welfare Benefits. Subject to Section 3(h) below, for a
two-year period following termination of employment, the Company
shall provide the Executive (and his family) with health, life
and other welfare benefits (but excluding disability benefits)
substantially similar to the benefits received by the Executive
(and his family) pursuant to welfare benefit programs of the
Company or its affiliates as in effect immediately during the 180
days preceding the Effective Date (or, if more favorable to the
Executive, as in effect at any time thereafter until the
termination of employment); provided, however, that no
compensation or benefits provided hereunder shall be treated as
compensation for purposes of any of the programs or shall result
in the crediting of additional service thereunder. For purposes
of determining the amount of such welfare benefits, any part of
which shall be based on compensation, the Executive's
compensation during the relevant two-year period shall be deemed
to be equal to the Executive's salary as in effect immediately
before the termination of employment or, if higher, as in effect
at any time during the 180-day period immediately preceding the
termination date, and the Highest Bonus Amount. To the extent
that any of the welfare benefits covered by this Section 3(g)
cannot be provided pursuant to the plan or program maintained by
the Company or its affiliates, the Company shall provide such
benefits outside the plan or program at no additional cost
(including, without limitation, tax cost) to the Executive and
his family.
h) New Employment. If the Executive secures new employment
during the two-year period following termination of employment,
the level of any benefit being provided pursuant to Section 3(g)
hereof shall be reduced to the extent that any such benefit is
being provided by the Executive's new employer. The Executive,
however, shall be under no obligation to seek new employment and,
in any event, no other amounts payable pursuant to this Agreement
shall be reduced or offset by any compensation received from new
employment or by any amounts claimed to be owed by the Executive
to the Company or its affiliates.
i) Equity Incentive Awards. Notwithstanding the provisions in
any stock option award, restricted stock award or other equity
incentive compensation award (the "Awards"), the Executive shall
become fully vested in all outstanding Awards and all otherwise
applicable restrictions shall lapse and for purposes of
determining the length of time the Executive has to exercise
rights, if applicable under any such Award, the Executive shall
be treated as if he had retired from the service of the Company
at or after age 55 and completion of ten years of service.
j) Outplacement and Financial Planning. The Company shall, at
its sole expense as incurred, provide the Executive with
outplacement services, the scope and provider of which shall be
selected by the Executive in his sole discretion (but at a cost
to the Company of not more than $30,000) or, at the Executive's
option, the use of office space, office supplies and equipment
and secretarial services for a period not to exceed one year.
The Company shall also continue to provide the Executive with
financial planning counseling benefits through the third
anniversary of the date of the Executive's termination of
employment, on the same terms and conditions as were in effect
immediately before the termination or, if more favorable, on the
Effective Date.
6. Obligation of the Company on a Covered Termination of
Employment Associated with a Change in Control of the Company.
In the event of a Covered Termination of Employment Associated
with a Change in Control of the Company, then the Company shall
provide the Executive with the same compensation and benefits and
subject to the same terms and conditions as are specified in
Section 5 above; provided, however that (i) the special
compensation provided for in Section 5(c) shall be three times
(rather than two times) the sum of the amounts specified in
subsection (a) and (b) of Section 5(c), (ii) the special
retirement plans lump sum provided for in Section 5(d) shall be
calculated as if the Executive's employment has continued for a
three-year period (rather than a two-year period) following his
termination of employment and (iii) the welfare benefits
provision of Section 5(f) shall be provided for a three-year
period (rather than a two-year period). In addition, the tax
gross-up provisions of Section 7 hereof shall apply. Further,
the deferral election for the Executive described in Section 5(f)
above shall apply, but only if the written irrevocable deferral
form is filed with the Company prior to the first date on which
a change in Control of the Company occurs.
7. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding,
and whether or not a Covered Termination of Employment occurs, in
the event it shall be determined that any payment or distribution
by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 7)
(a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive
of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect
thereto) and Excise Tax imposed on the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments
(b) Subject to the provisions of paragraph (c) of this Section
7, all determinations required to be made under this Section 7,
including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by a
certified public accounting firm designated by the Executive (the
"Accounting Firm"), which shall provide detailed supporting
calculations both to the Company and the Executive within fifteen
business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by
the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group
effecting the Change in Control, the Executive shall appoint
another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this
Section 7, shall be paid by the Company to the Executive within
five days of the receipt of the Accounting Firm's determination.
Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by
the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to
paragraph (c) of this Section 7 and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company
to or for the benefit of Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after the Executive is informed in writing
of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of
the thirty-day period following the date on which he gives such
notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim,
the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company.
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with
such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with
respect thereto) imposed as a result of such
representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this
paragraph (c) of Section 7, the Company shall control
all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and
all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner,
and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine;
provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the
Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and
provided, further, that any extension of the statute of
limitations relating to payment of taxes for the
taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would
be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to paragraph (c) of this Section 7, the
Executive becomes entitled to receive any refund with respect to
such claim, the Executive shall (subject to the Company's
complying with the requirements of paragraph (c) of this Section
7) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If after the receipt by the Executive of an
amount advanced by the Company pursuant to paragraph (c) of this
Section 7, a determination is made that the Executive shall not
be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of
such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
8. Termination of Employment. The Company shall be entitled to
terminate the Executive's employment on account of Disability
pursuant to the procedures set forth in Section (e) of the
Appendix, for Cause pursuant to the procedures set forth in
Section (a) of the Appendix, or without Cause by giving written
notice to the Executive of such termination. The Executive may
terminate his employment for Good Reason by giving the Company
written notice of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good
Reason. A termination of employment by the Executive for Good
Reason shall be effective on the fifth business day following the
date such notice is given, unless the notice sets forth a later
date (which date shall in no event be later than thirty days
after the notice is given). In the event of a dispute regarding
whether the Executive's voluntary termination qualifies as a
termination for Good Reason, no claim by the Company that the
same does not constitute a termination for Good Reason shall be
given effect unless the Company establishes by clear and
convincing evidence that such termination does not constitute a
termination for Good Reason. The Executive may also terminate
his employment without Good Reason by giving the Company written
notice of such termination.
9. Obligations of the Company on Termination of Employment for
Death, Disability, for Cause or by the Executive Other than for
Good Reason. If the Executive's employment is terminated by
reason of his death or Disability (but not under the
circumstances covered by paragraph (c)(iv) of the Appendix), or
if such employment is terminated by the Company for Cause or by
the Executive other than for Good Reason, the Company will pay to
the Executive's estate or legal representative or to the
Executive, as the case may be, all accrued but unpaid base salary
and all other benefits and amounts which may become due in
accordance with the terms of any applicable benefit plan,
contract, agreement or practice, including amounts which may have
become due under the terms of Sections 3 and 4 of this Agreement,
but no other compensation or benefits will be paid under this
Agreement.
10. Non-Compete Agreement. In consideration of this Agreement,
the Executive agrees that he will not, for a period of one year
from the date of his or her termination of employment with the
Company, directly or indirectly own, manage, operate, join,
control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any
manner, including but not limited to, holding the position of
shareholder, director, officer, consultant, independent
contractor, executive partner, or investor with any "Competing
Enterprise." For purposes of this paragraph, a "Competing
Enterprise" means any entity, firm or person engaged in a
business within the State of Wisconsin or the upper peninsula
area of the State of Michigan (the "Territory") which is in
competition with any of the businesses of the Company or any of
its subsidiaries within the Territory as of the date the
Executive's termination of employment, and whose aggregate gross
revenues, calculated for the most recently completed fiscal year
of the Competing Enterprise, derived from all such competing
activities within the Territory during such fiscal year, equal at
least 10% or more of such Enterprise's consolidated net revenues
for such fiscal year. If the Executive notifies the Company in
writing of any employment or opportunity which the Executive
proposes to undertake during the one year non-compete period, and
supplies the Company with any additional information which the
Company may reasonably request, the Company agrees to promptly
notify the Executive within thirty days after all information
reasonably requested by it has been provided, whether the Company
considers the proposed employment or opportunity to be prohibited
by these provisions and, if so, whether the Company is willing to
waive the same. Notwithstanding anything in this Section 10, the
Executive shall not be prohibited from acquiring or holding up to
2% of the common stock of an entity that is traded on a national
securities exchange or a nationally recognized over-the-counter
market.
11. Relocation Benefit. The Company will provide the Executive
with the same relocation benefits for his move from his current
residence to a residence near the Company's principal office in
Milwaukee, Wisconsin as are provided on the date of this
Agreement to the Company's President.
12. Successors and Binding Agreements.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or
otherwise) to all or substantially all of the business and/or
assets of the Company expressly to assume and to agree to perform
this Agreement in the same manner and to the same extent the
Company would be required to perform if no succession had taken
place. This Agreement shall be binding upon and inure to the
benefit of the Company and any such successor, and such successor
shall thereafter be deemed the "Company" for the purposes of this
Agreement.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's respective personal or legal
representative, executor, administrator, successor, heirs,
distributees and/or legatees.
(c) Neither the Company nor the Executive may assign, transfer
or delegate this Agreement or any rights or obligations hereunder
except as expressly provided in this Section. Without limiting
the generality of the foregoing, the Executive's right to receive
payments hereunder shall not be assignable or transferable,
whether by pledge, creation of a security interest or otherwise,
other than by a transfer by will or the laws of descent and
distribution. In the event the Executive attempts any assignment
or transfer contrary to this Section, the Company shall have no
liability to pay any amount so attempted to be assigned or
transferred.
13. Notices. All communications provided for herein shall be in
writing and shall be deemed to have been duly given when
delivered or five business days after having been mailed by
United States registered or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the
attention of the Secretary of the Company) at its principal
executive office and to the Executive at his principal residence,
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of a
change of address shall be effective only upon receipt.
14. Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws
of the State of Wisconsin without giving effect to the principles
of conflict of laws of such state, except that Section 15 shall
be construed in accordance with the Federal Arbitration Act.
15. Resolution of Disputes. The parties shall endeavor to
resolve any dispute arising out of or relating to this Agreement
by mediation in Milwaukee, Wisconsin, under the Mediation
Procedure of the Center for Public Resources ("CPR"). Unless the
parties agree otherwise, the mediator will be selected from the
CPR Panels of Distinguished Neutrals. Any such dispute which
remains unresolved 45 days after appointment of a mediator, shall
be finally resolved by arbitration in Milwaukee, Wisconsin, by a
sole arbitrator in accordance with the CPR Rules for
Non-Administered Arbitration, and judgment upon the award
rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The Company will pay any fees and costs of
the mediator in connection with the mediation, but the parties
agree to each pay one-half of the fees and costs of the
arbitrator in connection with the arbitration.
16. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which
shall remain in full force and effect. If any provision of this
Agreement shall be held invalid or unenforceable in part, the
remaining portion of such provision, together with all other
provisions of this Agreement, shall remain valid and enforceable
and continue in full force and effect to the fullest extent
consistent with law.
17. Entire Agreement; Amendments. This Agreement constitutes
the entire understanding and agreement of the parties with
respect to the matters discussed herein and supersedes all other
prior agreements and understandings, written or oral, between the
parties with respect thereto. There are no representations,
warranties or agreements of any kind relating thereto that are
not set forth in this Agreement. This Agreement may not be
amended or modified except by a written instrument signed by the
parties hereto or their respective successors and legal
representatives.
18. Withholding. The Company may withhold from any amounts
payable under this Agreement all federal, state and other taxes
as shall be legally required.
19. Certain Limitations. Nothing in this Agreement shall grant
the Executive any right to remain an executive, director or
employee of the Company or of any of its subsidiaries for any
period of time.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the day and date first written above.
WISCONSIN ENERGY CORPORATION
/s/Allen L. Leverett By: /s/Richard A. Abdoo
____________________ ___________________
ALLEN L. LEVERETT