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EXHIBIT (10)-6
WISCONSIN ELECTRIC POWER COMPANY
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DIRECTORS' DEFERRED COMPENSATION PLAN
AS RESTATED AS OF JANUARY 1, 1994
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Wisconsin Electric Power Company
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Directors' Deferred Compensation Plan
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I. PURPOSE
The purpose of the Wisconsin Electric Power Company Directors' Deferred
Compensation Plan (the "Plan") is to establish a method of paying
directors' compensation which will aid Wisconsin Electric Power Company
(the "Company") in attracting and retaining as members of its Board of
Directors persons whose abilities, experience and judgment can
contribute to the continued progress of the Company.
II. PARTICIPATION
(A) Definition of "Participant"
The term "Participant" as used herein refers to any former, present or
future member of the Board of Directors of the Company (the "Director")
who shall by election become subject to this Plan.
(B) Election By Directors
Any Director who is not also an officer or employee of the Company or of
an affiliate of the Company may elect to have all fees otherwise payable
to such Director for service as a Director retained by the Company and
paid in accordance with the Plan, effective on the first day of the
calendar month following the date of acknowledgement of receipt of such
election. Such election shall be made by notice in writing mailed or
delivered to the Secretary of the Company. All such fees, otherwise
payable, shall thereafter be retained by the Company until a written
notice of termination signed by Participant has been mailed or delivered
to the Secretary of the Company. A notice of termination of
authorization to retain all fees otherwise payable will be effective as
to those fees payable in the calendar month subsequent to the month in
which such notice of termination was received and acknowledged by the
Secretary of the Company but will have no force or effect on any fees
retained by the Company in the month such notice of termination was
mailed or delivered or any prior months, or on the dispersal of fees
retained in the month such notice of termination was mailed or delivered
or in any prior months.
III. DEFERRED COMPENSATION ACCOUNTS
An amount equivalent to any fees, which would otherwise be payable and
which have been retained by the Company under Paragraph II, shall be
credited to an account on the books of the Company, to be designated as
the Participant's Deferred Compensation Account (the "Account"), at the
time the fees would have been payable had Participant not agreed to have
the fees retained by the Company. The Account to which such retained
fees are credited shall be an unsecured claim against the general assets
of Company and shall be treated as any other account payable on the
books of the Company. Participant shall have no interest in the
Account, which is established merely as an accounting convenience and
which shall not operate to segregate any balance therein from the
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general assets of the Company. The Company may establish a grantor
trust to serve as a vehicle to hold amounts credited to the Accounts
established hereunder, but the trust shall be designed so that this Plan
remains an unfunded plan and no Participant or Beneficiary shall have
any rights other than those of an unsecured creditor.
IV. INTEREST
(A) Accrual of Interest
Interest shall accrue on the average balance in each Account which shall
be determined by averaging the beginning and ending balance of such
Account within the period intervening since interest was last credited
to the Account, except, in the case of a new Participant, within the
period from the effective date a Director becomes a Participant to the
next June 30 or December 31 or the date such Participant terminates
participation, whichever is earlier, and shall be credited to the
Account semiannually, as of June 30 and December 31 of each year, until
all distributions to which Participant, Participant's estate or
Beneficiary is entitled shall have been made. Whenever a lump sum
amount or final distribution is made as of a date other than June 30 or
December 31, interest shall be credited to the Account as of such
payment date.
(B) Rate of Interest
The rate of interest shall be the prime commercial rate as published by
Firstar Bank, Milwaukee, N.A. in effect on June 30, for the period
ending June 30, and December 31, for the period ending December 31, of
each year, except for any period in which any lump sum amount or final
distribution from an Account is made as of a date other than June 30 or
December 31, in which case the rate of interest shall be the prime
commercial rate as published by Firstar Bank, Milwaukee, N.A. in effect
on the date interest was last credited as determined above.
V. PAYMENT TO PARTICIPANTS
(A) No Payment during Tenure
None of the amounts including interest credited to the Account shall be
paid to Participant as long as Participant serves as a Director of the
Company or as a Director of Wisconsin Energy Corporation or any of
Wisconsin Energy Corporation's subsidiaries.
(B) Normal Payment Method
Subject to the provisions of Paragraphs VI and VII hereof, as of the
first business day of the sixth calendar month subsequent to the month
in which the later of the following events occurs, (i) Participant's
service as a Director with the Company terminates for any reason other
than death, (ii) Participant's service as a Director with Wisconsin
Energy Corporation and all of Wisconsin Energy Corporation's
subsidiaries terminates for any reason other than death, or (iii)
Participant attains the mandatory retirement age for Directors under
Board policy, the Company shall pay to Participant, if Participant be
living, one-tenth (1/10th) of the amount credited to the Account as of
said payment date (the "principal amount") and as of the first business
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day of each January thereafter, one-tenth (1/10th) of the principal
amount and in addition thereto any interest credited to the Account in
the period intervening since the last payment until a total of ten
payments have been made. Such ten payments, regardless of the total
amount thereof, shall constitute full payment of all amounts due
Participant under this Plan.
(C) Alternate Payment Methods
Upon written application of Participant made prior to the termination of
such Participant's service as a Director (which application shall be
irrevocable during the Participant's lifetime if approved by the
Company), and subject to the approval of the Company in its sole
discretion upon such terms and conditions as it may determine, the
Company may allow the following alternate payment methods:
(1) Subject to the provisions of Paragraphs VI and VII hereof, as of
the first business day of the sixth calendar month subsequent to
the month in which the later of the following events occurs, (i)
Participant's service as a Director with the Company terminates
for any reason other than death, (ii) Participant's service as a
Director with Wisconsin Energy Corporation and all of Wisconsin
Energy Corporation's subsidiaries terminates for any reason other
than death, or (iii) Participant attains the mandatory retirement
age for Directors under Board policy, the Company shall pay to
Participant, if Participant be living, one-tenth (1/10th) of the
amount credited to the Account as of said payment date (the
"principal amount") and as of the first business day of each
January thereafter, that portion of the amount credited to the
Account as of said payment date which is determined by multiplying
said Account balance by a fraction the numerator of which is one
(1) and the denominator of which is the number of years of
distribution remaining until a total of ten payments have been
made. Such ten payments, regardless of the total amount thereof,
shall constitute full payment of all amounts due Participant under
this Plan.
(2) Under either the Normal Payment Method, or the alternative under
Paragraph V(C)(1), if allowed, commence distribution of the
Account on an earlier date than that provided in Paragraph V(B),
which date shall in no event be earlier than the first day of the
calendar month subsequent to the month in which the later of the
following events occurs, (i) Participant's service as a Director
with the Company terminates or (ii) Participant's service as a
Director of Wisconsin Energy Corporation and all of Wisconsin
Energy Corporation's subsidiaries terminates.
(3) Under either the Normal Payment Method, or the alternative under
Paragraph V(C)(1), if allowed, commence distribution of the
Account on a later date than that provided in Paragraph V(B).
(4) Pay to Participant the amount standing in the Account in larger
installments or in a lump sum amount, in lieu of the amount and
form of payments provided in Paragraph V(B).
(D) Date of Payment
In all cases under any payment method, actual payment of the amounts due
shall be made within five business days after the determined payment
date.
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VI. PAYMENT TO BENEFICIARY, EXECUTOR OR ADMINISTRATOR OF PARTICIPANT
(A) Normal Payment Method
In the event of Participant's death, annual payments will be made to
Participant's Beneficiary (as hereinafter defined), provided that the
Beneficiary is alive at the time such payments are to be made, in the
following manner:
(1) If Participant dies while still serving as a Director of the
Company or as a Director of any of the Company's subsidiaries, the
payments will be in the same amount and payable at the same time
as the payments which would have otherwise been payable to
Participant had Participant's service to the Company as a Director
terminated on the date of Participant's death under the conditions
precedent for distribution described in Paragraph V(B) and had
Participant been alive until the ten payments had been paid under
Paragraph V(B).
(2) If Participant dies after such service has terminated and while
Participant is receiving payments under Paragraph V, the payments,
if any, will be in the same amount and payable at the same time as
if Participant had been alive until the ten payments had been paid
under Paragraph V(B).
(3) If Participant dies after such service has terminated, but before
payment had commenced under Paragraph V(B), the payments will be
in the same amount and payable at the same time as the payments
which would have otherwise been payable to Participant had
Participant's service as a Director terminated on the date of
Participant's death under the conditions precedent for
distribution described in Paragraph V(B) and had Participant been
alive until the ten payments had been paid under Paragraph V(B).
(B) Alternate Payment Methods
Upon written application of Participant's Beneficiary made prior to the
time any distribution under this Plan is payable to said Beneficiary
(which application shall be irrevocable if approved by the Company), and
subject to the approval of the Company in its sole discretion upon such
terms and conditions as it may determine, forms of payment as provided
in Paragraph V(C) may be made in lieu of the payments in Paragraph
VI(A).
(C) Payment in the Event of Beneficiary's Death
If the last Beneficiary who survives Participant shall die before
receiving the full amount payable hereunder, then the balance of the
Account not paid shall be paid in a lump sum to the estate of such
Beneficiary within six months after Company has been notified of such
death.
(D) Definition and Designation of Beneficiary
The term "Beneficiary" as used herein includes the plural and means any
person(s), including corporate or individual persons, designated by
Participant in a written instrument filed with the Secretary of the
Company. Participant may designate a primary beneficiary and, in the
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event of the death of the primary beneficiary, a contingent beneficiary.
The right is reserved to Participant to change the person or persons
designated as Beneficiary, by filing with the Secretary of the Company a
written notice of change in Beneficiary, and any such change shall not
require the consent of the Beneficiary.
(E) Payment in the Event no Beneficiary is Designated
If Participant has failed to designate a Beneficiary in a written
instrument filed with the Secretary of the Company, or if the
Beneficiary predeceases Participant, then the balance of the Account not
paid shall be paid in a lump sum amount to Participant's estate within
six months after Company has been notified of Participant's death.
(F) Date of Payment
In all cases under any payment method, actual payment of the amounts due
shall be made within five business days after the determined payment
date.
VII. MANDATORY LUMP SUM PAYMENT
Upon the occurrence of a "Change in Control" of Wisconsin Energy
Corporation, as defined in Exhibit A attached to and made a part of this
Plan, then notwithstanding any other provision hereof, the Company shall
promptly pay each Participant and each Beneficiary receiving benefits a
single lump sum equal to the amount credited to the Account as of the
payment date (without regard to whether the Participant is still serving
as a Director of the Company or any of its affiliates), in lieu of
whatever other method of payment, if any, had been elected or placed
into effect.
VIII. WITHHOLDING OF TAXES
The Company shall have the right to retain from payments payable to
Participant, Participant's estate or Beneficiary amounts required by any
government to be withheld and paid to such government with respect to
such payment.
IX. GENERAL PROVISIONS
(A) Termination, Amendment, or Modification of Plan
The Company may terminate, amend, or modify the Plan at any time,
provided that such termination, amendment or modification shall not
adversely affect the rights of any Participant, Participant's estate or
Beneficiary, to receive the amounts theretofore credited to
Participant's Account as provided in the Plan.
(B) Assignment by Company
The Company shall have the right to assign all of its right, title and
obligation in and under this Plan upon a merger or consolidation or upon
the purchase of substantially its entire business or assets, provided
such assignee agrees to perform after the effective date of such
assignment all of the terms, conditions and provisions imposed by this
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Plan upon the Company. In the event of such an assignment, all of the
rights and obligations of the Company under this Plan shall thereupon
cease and terminate.
(C) Assignment by Participant
No Participant, Participant's Beneficiary or estate shall have the power
to transfer, assign, encumber, commute or anticipate any amounts payable
hereunder.
(D) Approval of Alternate Payment Methods
Whenever it is provided in this Plan that matters are subject to
approval of the Company, authority for approval shall be exercised by
the Chief Executive Officer of the Company.
(E) Plan Administrator
This Plan shall be administered by the Secretary of the Company.
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EXHIBIT A
CHANGE IN CONTROL DEFINITION
For purposes of this Plan, a "change in control" with respect to
Wisconsin Energy Corporation shall mean the occurrence of any of the following
events, as a result of one transaction or a series of transactions:
(a) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but
excluding the Company, its affiliates and any qualified or
non-qualified plan maintained by the Company or its
affiliates) becomes the "beneficial owner" (as defined in
Rule 13d-3 promulgated under such Act), directly or
indirectly, of securities of the Company representing more
than 20% of the combined voting power of the Company's then
outstanding securities;
(b) individuals who constitute a majority of the Board
immediately prior to a contested election for positions on
the Board cease to constitute a majority as a result of such
contested election;
(c) the Company is combined (by merger, share exchange,
consolidation, or otherwise) with another corporation and as
a result of such combination, less than 60% of the
outstanding securities of the surviving or resulting
corporation are owned in the aggregate by the former
shareholders of the Company;
(d) the Company sells, leases, or otherwise transfers all or
substantially all of its properties or assets not in the
ordinary course of business to another person or entity; or
(e) the Board determines in its sole and absolute discretion
that there has been a Change in Control of the Company.
These Change in Control provisions shall apply to successive Changes in
Control on an individual transaction basis.