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EXHIBIT (10)-2
WISCONSIN ENERGY CORPORATION
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
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(As amended effective April 26, 1995)
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WISCONSIN ENERGY CORPORATION
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SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
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This plan, which is retitled the Wisconsin Energy Corporation Supplemental
Executive Retirement Plan, succeeds to and constitutes an amendment and
restatement of the Wisconsin Energy Corporation Executive Deferred
Compensation Plan; such amendment and restatement was effective as of
January 1, 1994; it was subsequently amended effective April 26, 1995. All
the provisions of this amended and restated Plan, as subsequently amended,
shall apply to all Participants, active and retired, except for
Nancy R. Noeske and except as otherwise specifically provided herein. The
rights of Ms. Noeske shall be as defined in the Wisconsin Energy Corporation
Supplemental Executive Retirement Plan as restated and effective as of
January 1, 1989 (including amendments made in February of 1990 which became
effective as of January 1, 1989) and as defined in that certain Special
Employment, Retirement and Release Agreement made between Wisconsin Electric
Power Company and Ms. Noeske in 1993.
1. PURPOSE. The Supplemental Executive Retirement Plan (the "Plan") is
maintained by Wisconsin Energy Corporation (the "Company") for the
purpose of providing supplemental retirement benefits for a select group
of management or highly compensated employees (key employees) within the
meaning of Title 1 of the Employee Retirement Income Security Act.
The objective of the Plan is to provide an incentive for key employees
to remain in the service of Wisconsin Energy Corporation and/or its
subsidiaries by providing them with supplemental retirement benefits
which are payable, except for the change in control provisions hereafter
set forth, only if they remain in the service of Wisconsin Energy
Corporation and/or its subsidiaries until they die or retire.
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2. PARTICIPATION.
(A) Definition of a "Participant".
The term "Participant" as used herein refers to any key employee
of the Company and/or any of its subsidiaries who shall have
automatically or by designation become subject to this Plan and
who has not been removed from the Plan pursuant to (D) herein.
(B) Key Employees Presently Party to the Plan.
Any key employee who was a party to this Plan before
January 1, 1989, (this Plan being designated the Wisconsin Energy
Corporation Executive Deferred Compensation Plan), shall
automatically remain subject to the Plan as amended on that date,
and any Monthly Benefits payable to a Participant shall be ad-
ministered subject to the Plan as amended and all beneficiary
designations under the Plan in effect immediately before
January 1, 1989 shall remain in effect until changed by proper
notice under the Plan.
(C) Key Employees Not Presently Party to the Plan.
Key employees not presently party to the Plan who are designated
by the Chief Executive Officer of Wisconsin Energy Corporation and
whose designation is approved by the Boards of Directors of
Wisconsin Energy Corporation and the employing company or
companies shall be eligible as Participants for payments under the
Plan in accordance with the provisions hereof.
(D) Removal of a Participant.
A Participant may be removed from the Plan at any time upon the
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recommendation of the Chief Executive Officer of Wisconsin Energy
Corporation and with the approval of the Boards of Directors of
Wisconsin Energy Corporation and the employing company or
companies, provided no such removal may eliminate or reduce any
benefits which are protected under Section 12 hereof in the event
of termination of this Plan.
3. PAYMENTS UPON RETIREMENT. Upon the retirement of a Participant as an
employee of Wisconsin Energy Corporation and all of its subsidiaries
either:
(a) at age 60 (or in Mr. R. A. Abdoo's case, age 58, and if his
actual retirement occurs at or after age 58 but prior to age
60, he shall be deemed to be age 60 for purposes of all
calculations respecting Monthly Benefits A and B hereof) or
later, or
(b) prior to age 60 (or in Mr. R. A. Abdoo's case, age 58)
subject to approval by the Chief Executive Officer of
Wisconsin Energy Corporation with the Boards of Directors of
the Wisconsin Energy Corporation and employing company or
companies,
such Participant shall be entitled to receive Monthly Benefit A and
Monthly Benefit B described in paragraph 4 below. Further, subject to
the above conditions, Participants listed on the attached Schedule (the
"Listed Participants") shall be entitled to receive Monthly Benefit C
described in paragraph 4 below.
4. AMOUNT OF BENEFIT. Monthly Benefit A shall equal (a) less (b) where:
(a) equals the Participant's accrued benefit(s), as of the date
of determination, calculated on a straight life annuity basis
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under the provisions of the Company's and/or all of its
subsidiaries' applicable qualified defined benefit retirement
plan(s), without regard to any limitations on benefits imposed by
IRC Section 415 or the $200,000 limitation on annual compensation,
as adjusted from time to time, imposed by IRC Section 401(a)(17)
applicable to the qualified plan; and
(b) equals the Participant's accrued benefit(s), as of the date
of determination, calculated on a straight life annuity basis
under the provisions of the Company's and/or its subsidiaries'
applicable qualified defined benefit retirement plan(s).
For all Participants whose service with the Company or any of its
subsidiaries terminated on or before December 31, 1993, Monthly
Benefit B and post retirement death benefits with respect to Monthly
Benefit B shall be as defined in this plan as restated effective as of
January 1, 1989 (including amendments made in February, 1990 which
became effective as of January 1, 1989). For all Participants still in
the active service of the Company or any of its subsidiaries on and
after January 1, 1994, Monthly Benefit B shall equal a life annuity of
10% of the average total monthly compensation received by the
Participant from the Company and/or all of its subsidiaries during
whichever period of 36 consecutive months produces the highest average
total monthly compensation. [Solely for purposes of determining Monthly
Benefit B, average total monthly compensation during such 36-month
period includes the monthly average of (i) any Incentive Award
determined under the Company's Executive Incentive Compensation Plan,
calculated as of the date of determination as if then paid in full as
base salary and disregarding the actual date of payment of any such
Incentive Award and the amount thereof at the time of payment, (ii) the
amount of any other annual incentive salary award paid to the
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Participant, and (iii) any amounts of base salary that would have been
paid to the Participant during such 36-month period but are not paid
because of deferral elections made by the Participant under a savings or
other deferred compensation plan.]
Monthly Benefit C shall equal (a) less (b) where:
(a) equals the Listed Participant's accrued benefit(s), as of
the date of determination, calculated on a straight life annuity
basis under the provisions of the Wisconsin Electric Power Company
Management Employees' Retirement Plan and/or the Wisconsin Natural
Gas Company Management Employees' Retirement Plan, as in effect on
December 31, 1988 (the "1988 Management Plans", whichever such
Plan(s) applied to the Listed Participant as of December 31, 1988)
plus any benefits under any individual supplemental benefits
agreement(s) between the Company, and/or any of its subsidiaries
and any Listed Participant, all calculated without regard to any
limitations imposed by IRC Section 415 or the $200,000 limitation
on annual compensation, as adjusted from time to time, imposed by
IRC 401(a)(17), and all calculated under the further assumptions
that (i) the 1988 Management Plans continued without change until
the date of determination; (ii) any deferrals of base salary
elected by the Listed Participant under the Wisconsin Energy
Corporation Executive Deferred Compensation Plan were disregarded
and instead included in the compensation base for calculating
retirement income under the 1988 Management Plans; and (iii) the
amount of any Incentive Award or special award to the Listed
Participant, calculated at the time of its determination by the
Board, had also been included in the compensation base for
calculating retirement income under the 1988 Management Plans; and
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(b) equals the sum of (i) the Listed Participant's accrued bene-
fit(s), as of the date of determination, calculated on a straight
life annuity basis under the provisions of the Wisconsin Electric
Power Company Management Employees' Retirement Plan and/or the
Wisconsin Natural Gas Company Management Employees' Retirement
Plan, whichever such Plan(s) applies to the Listed Participant, as
in effect on the date of determination; plus (ii) any actual
benefits under any individual supplemental benefits agreement(s)
between the Company and/or any of its subsidiaries and any Listed
Participant, plus (iii) any actual Monthly Benefit A, and plus
(iv) any actual "make whole" pension supplements due under the
provisions of Section IX(1) and (2) of the Wisconsin Energy
Corporation Executive Deferred Compensation Plan.
5. FORM OF PAYMENT. Monthly Benefits A, B and C shall be paid in the same
form as the benefit(s) paid from the Company's and/or its subsidiaries'
applicable qualified defined benefit retirement plan(s). If a form
other than a straight life annuity is applicable, the same option and
actuarial equivalent factors that apply in such qualified defined
benefit retirement plans(s) shall apply to Monthly Benefits A, B and C.
Monthly Benefits A, B and C shall be administered in the same manner as
the provisions of the applicable qualified retirement plan(s) are
administered. Notwithstanding any other provision hereof, a Participant
who is entitled to begin receiving payments under any or all of Monthly
Benefits A, B or C may make a written request to the Board of Directors
of Wisconsin Energy Corporation for a lump sum payment of an amount
equal to the then present value of all benefits then accrued under this
plan, calculated using (i) an interest rate equal to the five-year
United States Treasury Note yield in effect on the last business day of
the month prior to payment as such yield is reported in the WALL STREET
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JOURNAL or comparable publication and (ii) the mortality tables then in
use under the qualified defined benefit plan of the Company or its
subsidiaries applicable to the Participant. The Board of Directors, in
its sole and absolute discretion, may grant or deny such request.
6. PRERETIREMENT DEATH BENEFITS RESPECTING MONTHLY BENEFITS A AND C.
Provided that a Participant is entitled to preretirement spouse's
benefits under the Company's and/or its subsidiaries' applicable
qualified defined benefit retirement plan(s), payments of Monthly
Benefits A and C (reduced according to the same ratio as the spouse's
benefit(s) under the qualified plan(s) bears to the Participant's
accrued benefit(s) as of his/her date of death) shall become payable
upon the death of the Participant before retirement to the spouse of
such Participant for the balance of his/her lifetime.
7. PRE- AND POST-RETIREMENT DEATH BENEFITS RESPECTING MONTHLY BENEFIT B.
If a Participant dies before payments of Monthly Benefit B commence, the
beneficiary or beneficiaries designated by the Participant shall become
entitled to receive a lump sum amount equal to the then present value of
Monthly Benefit B, calculated using (i) an interest rate equal to the
five-year United States Treasury Note yield in effect on the last
business day of the month prior to the date of death as such yield is
reported in the WALL STREET JOURNAL or comparable publication, and
(ii) the mortality tables then in use under the qualified defined
benefit plan of the Company or its subsidiaries applicable to the
Participant. If a retired Participant receiving Monthly Benefit B dies,
whether any payments continue thereafter will depend upon the form of
payment such Participant had elected.
8. PAYMENTS UPON CHANGE IN CONTROL. For purposes of this paragraph 8, a
"Change in Control" with respect to the Company shall mean the
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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.
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These Change in Control provisions shall apply to successive Changes in
Control on an individual transaction basis.
Upon the occurrence of a Change in Control, then notwithstanding
any other provision of this plan, the Company shall promptly cause
to be paid to each active and retired Participant or beneficiary
receiving benefits under this plan a lump sum amount equal to the
then present value of all benefits then accrued under this plan,
calculated using (i) an interest rate equal to the five-year
United States Treasury Note yield in effect on the last business
day of the month prior to the date when a Change in Control event
described in subparagraphs (a) through (e) above has occurred as
such yield is reported in the WALL STREET JOURNAL or comparable
publication, and (ii) the mortality tables then in use under the
qualified defined benefit plan of the Company or its subsidiaries
applicable to the Participant. Such payments shall be made
without regard to whether the Participant's employment with the
Company or any of its subsidiaries is continuing. However, if the
Participant in fact so continues and this plan continues,
appropriate provisions shall be made so that any subsequent
payments made from this plan are reduced to reflect the value of
such lump sum payments.
9. GOVERNMENT REGULATIONS. It is intended that the Plan will comply with
all applicable laws and governmental regulations, and the Company and/or
its subsidiaries shall not be obligated to perform an obligation
hereunder in any case where, in the opinion of the Company's Counsel,
such performance would result in violation of any law or regulation.
All amounts payable under this plan shall be subject to all applicable
withholding taxes.
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10. NONASSIGNMENT. No benefit(s) under the Plan, nor any other interest
hereunder of any Participant or beneficiary shall be assignable,
transferable, or subject to sale, mortgage, pledge, hypothecation,
anticipation, garnishment, attachment, execution, or levy of any kind.
11. PROVISION OF BENEFITS. The Company may establish a grantor trust (a
"rabbi trust") to serve as a vehicle to hold such contributions as the
Company may choose to make to pre-fund its obligation for benefits
hereunder, but the trust shall be designed so that all assets therein
are subject to the claims of the creditors of the Company or any of its
subsidiaries which have used such rabbi trust in the event of
insolvency, consistent with the provisions of Revenue Procedure 92-64.
Notwithstanding the existence of such a rabbi trust, the plan shall
remain an unfunded plan. A Participant's rights to benefits under the
plan shall be those of an unsecured creditor of the Company and/or its
subsidiaries.
12. TERMINATION OR MODIFICATION OF PLAN. The Board of Directors of
Wisconsin Energy Corporation shall have the right to terminate or modify
the Plan at any time and from time to time, provided that no such action
may eliminate or reduce or change the time or manner of payment of any
benefits which: (i) have already become payable hereunder to any
Participant or beneficiary; or (ii) would have become payable to any
Participant without the need for any approval under the terms of
Section 3 hereof if he or she had retired immediately before such action
is taken.
13. CLAIM PROCEDURES. A Participant or beneficiary (a 'Claimant') may file
a written request for benefits or claim with the Company under the Plan.
In the event of any dispute with respect to such a claim, the following
claim procedures shall apply:
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(a) The Company, acting as the administrator for this Plan,
shall notify the Claimant within 90 days of receipt by the
Company of a written claim of its allowance or denial,
unless the Claimant receives written notice from the Company
prior to the end of the initial 90-day period indicating
that special circumstances require an extension of time for
decision. A written notice of decision shall be provided to
the Claimant and if the claim is denied in whole or in part,
the notice shall contain the following information: the
specific reasons for the denial; specific reference to
pertinent provisions of the Plan on which the denial is
based; if applicable, a description of any additional
material information necessary to perfect the claim and an
explanation of why such information is necessary; and an ex-
planation of the claim review procedure.
(b) A Claimant is entitled to request a review of any denial of
his/her claim by the Board of Directors of the Company or
Committee thereof. The request for review must be submitted
in writing within 60 days of mailing of notice of the
denial. Absent a request for review within the 60-day pe-
riod, the claim will be deemed to be conclusively denied.
The Claimant or his/her representative shall be entitled to
review all pertinent documents, and to submit issues and
comments orally and in writing. The Board of Directors of
the Company or Committee thereof shall render a review
decision in writing, within 60 days after receipt of a
request for a review, provided that, in special
circumstances (such as the necessity of holding a hearing)
the Board of Directors of the Company or Committee thereof
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may extend the time for decision by not more than 60 days
upon written notice to the Claimant. The Claimant shall
receive notice of the separate review decision of the Board
of Directors or Committee, together with specific reasons
for the decision and reference to the pertinent provisions
of this plan.
(c) The Company as the administrator of this Plan shall have
full and complete discretionary authority to determine
eligibility for benefits, to construe the terms of the Plan
and to decide any matter presented through the claims review
procedure. Any final determination by the Company shall be
binding on all parties. If challenged in court, such
determination shall not be subject to DE NOVO review and
shall not be overturned unless proven to be arbitrary and
capricious upon the evidence considered by the Company at
the time of such determination.
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Schedule to the
Wisconsin Energy Corporation
Supplemental Executive Retirement Plan
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The following is a list of the Company officers who have been designated
as eligible for Monthly Benefit C:
T. J. Cassidy
K. E. Wolters
R. W. Britt
C. S. McNeer
C. W. Fay
R. E. Skogg
H. R. Platz
J. E. Speaker
J. G. Remmel
R. H. Gorske
R. K. Espe
J. W. Boston
J. H. Goetsch
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