EXHIBIT 10F-5
WPS RESOURCES CORPORATION
DEFERRED COMPENSATION PLAN
EFFECTIVE JANUARY 1, 1996
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WPS RESOURCES CORPORATION
DEFERRED COMPENSATION PLAN
WPS Resources Corporation Deferred Compensation Plan (the "Plan")
has been established effective January 1, 1996 to promote the best
interests of WPS Resources Corporation (the "Company") and the
stockholders of the Company by (1) attracting and retaining well-
qualified persons for service as non-employee directors of the Company
and designated subsidiaries or affiliates; and (2) attracting and
retaining key management employees possessing a strong interest in the
successful operation of the Company and its subsidiaries or affiliates
and encouraging their continued loyalty, service and counsel to the
Company and its subsidiaries or affiliates. This Plan replaces
Deferred Compensation Plans 008, 009, 010 and 011 previously
maintained by Wisconsin Public Service Corporation.
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ARTICLE I. DEFINITIONS AND CONSTRUCTION
Section 1.011 Definitions. The following terms have the
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meanings indicated below unless the context in which the term is used
clearly indicates otherwise:
(a) "Account" means the record-keeping account or accounts
maintained by the Company or a subsidiary or affiliate for each
Participant, including to extent applicable to any such Participant,
Reserve Account A, Reserve Account B and the Stock Account.
(b) "Beneficiary" means the person or entity designated by the
Participant to be his beneficiary for purposes of this Plan. If a
valid designation of Beneficiary is not in effect at the time of the
death of a Participant, the estate of the Participant is deemed to be
the sole Beneficiary. If a Beneficiary dies while entitled to receive
distributions from the Plan, any remaining payments shall be paid to
the estate of the Beneficiary. Beneficiary designations shall be in
writing, filed with the Secretary, and in such form as the Secretary
may prescribe for this purpose.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means any of the following events:
(i) The shareholders of the Company
approve a definitive agreement
to merge or consolidate the
Company with or into another
corporation in a transaction in
which neither the Company nor
any of its subsidiaries will be
the surviving corporation, or to
sell or otherwise dispose of all
or substantially all of the
Company's assets to any
corporation, person, other
entity or group (other than the
Company or any of its
subsidiaries);
(ii) any corporation, person, other
entity or group (other than the
Company or any of its
subsidiaries or the Wisconsin
Public Service Corporation
Employee Stock Ownership Plan
and Trust or the WPS Resources
Corporation Deferred
Compensation and Supplemental
Benefits Trust) becomes the
beneficial owner of stock
representing fifteen percent
(15%) or more of the voting
power of the shares of capital
stock of the Company;
(iii) during any period of two (2)
consecutive years, individuals
who at the beginning of such
period were members of the
Board, together with members of
the Board whose election by the
Board or nomination for election
by the Company's shareholders
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was approved by a vote of at
least two-thirds (2/3) of the
directors then still in office,
cease for any reason to
constitute at least a majority
of the Board;
(iv) there is a loss of fifteen
percent (15%) or more of the
customers of Wisconsin Public
Service Corporation as a
consequence of the exercise of
statutorily granted condemnation
powers by any governmental
entity.
(e) "Company" means WPS Resources Corporation, a Wisconsin
corporation, or any successor corporation.
(f) "Compensation" means (i) for a Director, the Retainer Fee
and (ii) for an Executive the base monthly salary or wage payable by
the Company or designated subsidiary or affiliate thereof for services
performed, including elective contributions to a Section 125, 129 or
401(k) arrangement or Voluntary Deferrals to this Plan, but excluding
extraordinary payments such as overtime, bonuses, meal allowances,
reimbursed expenses, termination pay, moving pay, commuting expenses,
Mandatory Deferrals to this Plan or other non-elective deferred
compensation payments or accruals, stock options, the value of
employer-provided fringe benefits or coverage, and any contributions
on behalf of the Executive paid by the Company or designated
subsidiary or affiliate thereof to a survivor's income benefit plan or
any other employee benefit plan within the meaning of ERISA, all
determined in accordance with such uniform rules, regulations or
standards as may be prescribed by the Compensation Committee.
(g) "Compensation Committee" means the Compensation Committee
of the Board, which functions as the joint Compensation Committee for
the Company and for Wisconsin Public Service Corporation.
(h) "Code" means the Internal Revenue Code of 1986, as
interpreted by regulations and rulings issued pursuant thereto, all as
amended and in effect from time to time.
(i) "Director" means a non-employee director of the Company
or a non-employee member of the board of directors of a subsidiary or
affiliate of the Company who has been designated by the Compensation
Committee as covered under or being eligible to participate in the
Plan.
(j) "ERISA" means the Employee Retirement Income Security Act
of 1974, as interpreted by regulations and rulings issued pursuant
thereto, all as amended and in effect from time to time.
(k) "Executive" means a common law employee of the Company or
any subsidiary or affiliate of the Company who has been designated by
the Compensation Committee as covered under or otherwise being
eligible to participate in this Plan.
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(l) "Mandatory Deferral" means the amount which may from time
to time be credited to the Stock Account of an Executive in accordance
with Section 3.01 and for which the Executive does not receive the
option between receiving such amount as current cash compensation and
deferring such amount into the Plan.
(m) "Participant" means either a Director or Executive who is
participating in the Plan and on whose behalf one or more Accounts is
maintained.
(n) "Retainer Fee" means those fees paid by the Company or a
subsidiary or affiliate thereof to non-employee directors for services
rendered on the Board or any committee of the Board, or for service on
the board of directors of a subsidiary or affiliate, including
attendance fees and fees for serving as committee chair.
(o) "Secretary" means the Secretary of the Company (or his
delegate).
(p) "Trust" means the WPS Resources Corporation Deferred
Compensation and Supplemental Benefits Trust or other funding vehicle
which may from time to time be established, as amended and in effect
from time to time.
(q) "Voluntary Deferrals" mean amounts credited, in
accordance with a Participant's election, to his Account in lieu of
the payment of an equal amount of current Compensation.
(r) "WPS Resources Stock" means the common stock, $1.00 par
value, of the Company.
(s) "WPS Resources Stock Units" means the hypothetical shares
of the common stock, $1.00 par value, of the Company, that may be
credited to the Stock Account of an Executive as a result of Mandatory
Deferrals or the Stock Account of either a Director or Executive as a
result of Voluntary Deferrals.
Section 1.012. Construction and Applicable Law. (a) Wherever
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any words are used in the masculine, they shall be construed as though
they were used in the feminine in all cases where they would so apply;
and wherever any words are use in the singular or the plural, they
shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.
Titles of articles and sections are for general information only, and
the Plan is not to be construed by reference to such items.
(b) This Plan, as applied to Executives, is intended to be a
plan of deferred compensation maintained for a select group of
management or highly compensated employees as that term is used in
ERISA, and shall be interpreted so as to comply with the applicable
requirements thereof. In all other respects, the Plan is to be
construed and its validity determined according to the laws of the
State of Wisconsin to the extent such laws are not preempted by
federal law. In case any provision of the Plan is held illegal or
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invalid for any reason, the illegality or invalidity will not affect
the remaining parts of the Plan, but the Plan shall, to the extent
possible, be construed and enforced as if the illegal or invalid
provision had never been inserted.
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ARTICLE II. PLAN ACCOUNTS
Section 1.021. Establishment of Accounts. One or more of the
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following Accounts will be established in the name of each Participant
to reflect that Participant's interest in the Plan:
(a) Reserve Account A
(b) Reserve Account B
(c) Stock Account
Section 1.022. Reserve Account A. (a) This Account will be
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credited with the reserve account balance accumulated by a Participant
as of December 31, 1995 under the prior deferred compensation program
of Wisconsin Public Service Corporation. Except for attributed
earnings as described below, no further "contributions" or credits of
any kind will be made to this Account on behalf of a Participant.
(b) As of the end of each Plan Year, the Account will be
credited with an interest equivalent on the balance in the Account
from time to time during the year. The annual interest equivalent
will be the sum (on a non-compounded basis) of the attributed earnings
for each month during the year based on the Account balance as of the
last day of the month. Unless modified by the Compensation Committee,
the interest equivalent rate for any month will be the greater of:
(i) one-half of one percent (0.5%); or
(ii) one-twelfth (1/12) of the return
on common shareholders' equity
(ROE). For the months of April
through September, ROE means the
consolidated return on equity of
the Company and all subsidiaries
and affiliates for the twelve
(12) months ended on the
preceding March 31 as calculated
pursuant to the Company's
standard accounting procedure
for financial reporting to
shareholders. For the months
October through March, ROE means
return on equity as described
above for the twelve (12) months
ended on the preceding September
30.
(c) The Compensation Committee may revise the interest
equivalent rate described in Section 2.02(b) above or the manner in
which it is calculated, but in no event shall the rate be less than
six percent (6%) per annum. Any such revised rate shall be effective
with the calendar month following such action by the Compensation
Committee.
(d) Notwithstanding Section 2.02(b) and (c), in the event of
a Change in Control, the minimum rate of interest equivalent shall be
the greater of (A) six percent (6%) per annum, or (B) for each month
for which attributed earnings are required to be calculated, a rate
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equal to two (2) percentage points above the prime lending rate at
Firstar Bank Milwaukee, Milwaukee, Wisconsin as of the last business
day of that month.
Section 1.023. Reserve Account B. (a) This Account shall be
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credited with Voluntary Deferrals made after December 31, 1995 which a
Participant elects to allocate to this Account or that are otherwise
allocated to this Account in accordance with Section 3.02(c)(ii).
(b) As of the end of each Plan Year, the Account will be
credited with an interest equivalent on the balance in the Account
from time to time during the year. The annual interest equivalent
will be the sum (on a non-compounded basis) of the attributed earnings
for each month during the year based on the Account balance as of the
last day of each month. Unless modified by the Compensation
Committee, the interest equivalent rate for any month will be the
greater of:
(i) one-half of one percent (0.5%); or
(ii) seventy percent (70%) of one-
twelfth (1/12) of the return on
common shareholders equity
(ROE). For the months of April
through September, ROE means the
consolidated return on equity of
the Company and all subsidiaries
or affiliates for the twelve
(12) months ended on the
preceding March 31 as calculated
pursuant to the Company's
standard accounting procedure
for financial reporting to
shareholders. For the months
October through March, ROE means
return on equity as described
above for the twelve (12) months
ended on the preceding September
30.
(c) The Compensation Committee may revise the interest
equivalent rate described in Section 2.03(b) above or the manner in
which it is calculated, but in no event shall the rate be less than
six percent (6%) per annum. Any such revised rate shall be effective
with the calendar month following such action by the Compensation
Committee.
(d) Notwithstanding Section 2.03(b) and (c), in the event of
a Change in Control, the minimum rate of interest equivalent shall be
the greater of (A) six percent (6%) per annum, or (B) for each month
for which attributed earnings are required to be calculated, a rate
equal to two (2) percentage points above the prime lending rate at
Firstar Bank Milwaukee, Milwaukee, Wisconsin as of the last business
day of that month.
Section 1.024. Stock Account. (a) This Account shall be
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credited with all Mandatory Deferrals made after December 31, 1995 and
those Voluntary Deferrals made after December 31, 1995 which a
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Participant, in accordance with Section 3.02(c)(ii), elects to
allocate to this Account.
(b) As of the end of each month, all Voluntary and Mandatory
Deferrals made by or on behalf of a Participant during that month and
allocated to the Participant's Stock Account (the "Convertible
Amount") shall be converted, for record-keeping purposes, into whole
and fractional WPS Resources Units, with fractional units calculated
to four decimal places. The conversion shall be accomplished by
dividing each Participant's Convertible Amount by the average purchase
price of all shares of WPS Resources Stock purchased during that month
by or on behalf of the Trust and the WPS Resources Corporation
Dividend Reinvestment and Stock Purchase Plan. Likewise, any
dividends that would have been payable on the WPS Resources Stock
Units credited to a Participant's Stock Account had such Units been
actual shares of WPS Resources Stock shall be converted, for record-
keeping purposes, into whole and fractional WPS Resources Stock Units
based on the average purchase price of all shares of WPS Resources
Stock purchased by or on behalf of the Trust and the WPS Resources
Corporation Dividend Reinvestment and Stock Purchase Plan during the
month in which the dividend is paid.
Section 1.025. Accounts are For Record-keeping Purposes Only.
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The Plan Accounts described in this Article II above serve solely as a
device for determining the amount of benefits accumulated by a
Participant under the Plan, and shall not constitute or imply an
obligation on the part of the Company (or a subsidiary or affiliate
thereof) to fund such benefits. In any event, the Company (or a
subsidiary or affiliate thereof) may, in its discretion, set aside
assets equal to part or all of such account balances and invest such
assets in Company stock, life insurance or any other investment deemed
appropriate. Any such assets, including WPS Resources Stock and any
other assets held under the Trust, shall be and remain the sole
property of the Company (or a subsidiary or affiliate thereof) and
except to the extent that the Trust authorizes a Participant to
exercise voting rights with respect to WPS Resources Stock held in the
Trust, a Participant shall have no proprietary rights of any nature
whatsoever with respect to such assets.
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ARTICLE III. MANDATORY AND VOLUNTARY DEFERRALS
Section 1.031. Mandatory Deferrals. The Compensation
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Committee may, from time to time, authorize a Mandatory Deferral to be
made on behalf of covered Executives. The authorization of any such
contribution, the Executives entitled to the contribution, and the
amount to be credited to each eligible Executive, shall be determined
by the Compensation Committee in its sole discretion; provided that
the maximum Mandatory Deferral for any year shall not exceed thirty
percent (30%) of an Executive's Compensation for the year. Any
Mandatory Deferral will be credited to an eligible Executive's Stock
Account and converted into WPS Resources Stock Units in accordance
with Section 2.04.
Section 1.032. Election to Make Voluntary Deferrals. (a) A
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Participant may elect to make Voluntary Deferrals by submitting a
properly completed and signed election form to the Secretary on or
before December 20, 1995. If the Participant so elects, Voluntary
Deferrals will commence with respect to Compensation earned by a
Participant on or after January 1, 1996. Notwithstanding the
foregoing, if, as of January 1, 1996, the Participant has in effect an
election under the prior deferred compensation program maintained by
Wisconsin Public Service Corporation and does not file an election
with the Secretary in accordance with this Section 3.02(a), the prior
election shall be deemed the Participant's initial election under this
Plan.
(b) If a Director or Executive first becomes eligible to
participate in the Plan following the election period described in
Section 3.02(a) above (such as, for example, a Director who commences
service or an Executive who is newly designated by the Compensation
Committee as being eligible) the initial deferral election may be made
within thirty (30) days of the date that such person first becomes
eligible under the Plan, and shall be effective with respect to
Compensation earned by the Participant in the month following the
month during which the deferral election is made.
(c) A Participant's election shall be in such form as the
Secretary may prescribe, and shall specify:
(i) The percentage or dollar amount
of Compensation to be deferred
as a Voluntary Deferral. A
Director may elect to defer all
or any part of his Compensation,
in whole dollar amounts or in
increments of one percent (1%).
An Executive may, without the
consent of the Compensation
Committee, elect to defer a
portion of his Compensation, in
whole dollar amounts or in
increments of one percent (1%),
provided that the amount or
percentage elected does not
exceed thirty percent (30%) of
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the Executive's Compensation.
An Executive may elect to defer
more than thirty percent (30%)
of Compensation only if the
Compensation Committee has
approved the Executive's
specific deferral percentage or
amount.
(ii) Whether the Voluntary Deferrals
are to be credited to the
Participant's Reserve Account
(Reserve Account B) or the
Participant's Stock Account. If
the Participant desires to
allocate Voluntary Deferrals to
both his Reserve and Stock
Accounts, the election must
further specify the portion of
the Voluntary Deferrals, in
whole dollar amounts or in
increments of one percent (1%),
to be allocated to each Account.
Notwithstanding anything to the
contrary herein, Voluntary
Deferrals in excess of thirty
percent (30%) of an Executive's
Compensation shall be credited
to Reserve Account B, and the
Executive's election under this
Section 3.02(c)(ii) shall not
apply to any such amounts.
(d) An election shall be deemed made only when it is received
by the Secretary, and shall remain in effect until modified by the
Participant in accordance with Section 3.03 below or otherwise revoked
in accordance with Plan rules.
Section 1.033. Revision or Modification of Voluntary Deferral
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Election. (a) A Participant's initial election under Section 3.02
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(including an election not to make Voluntary Deferrals) shall remain
in effect from year to year unless revised or modified by the
Participant in accordance with this Section 3.03 or otherwise revoked
in accordance with Plan rules.
(b) Except as provided in Section 3.03(c) below with respect
to a Participant who is subject to Section 16 of the Securities
Exchange Act of 1934 ("Exchange Act"), a Participant may modify his
then current election (including an election not to make Voluntary
Deferrals) by filing a revised election form, properly completed and
signed, with the Secretary. The revised election will be effective
with respect to Compensation earned on and after the first day of the
month that is coincident with or next following the date on which it
is received by the Secretary.
(c) A Participant who is subject to Section 16 of the
Exchange Act may modify his then current election (including an
election not to make Voluntary Deferrals) by filing a revised election
form, properly completed and signed, with the Secretary. The revised
election will be effective with respect to Compensation earned on or
after the first day of the month that is at least six (6) months after
the revised election is received by the Secretary. This Section
3.03(c) shall become effective on or after the mandatory effective
date for complying with "New Rule 16b-3" [SEC Release No. 34-34513
(August 10, 1994)].
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(d) An election shall be deemed revised in accordance with
this Section 3.03 only when the revised election is received by the
Secretary, and once effective, the revised election shall remain in
effect until further revised in accordance with this Section 3.03 or
otherwise revoked in accordance with Plan rules. Revised elections
are prospectively effective with respect to Compensation earned on or
after the applicable effective date described in Section 3.03(b) and
(c) above. A revised election does not operate to modify or otherwise
reallocate the amounts deferred prior to the effective date of the
revised election.
Section 1.034. Involuntary Termination of Voluntary Deferral
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Elections. A deferral election shall be automatically revoked upon
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termination of service as a Director (in the case of a Director) or
termination of employment (in the case of an Executive). In addition,
an Executive's deferral election shall terminate on the first day of
the Plan Year following the date that the Compensation Committee
determines that the Executive is no longer eligible to participate in
the Plan, including any such action that may be necessary in order for
the Plan to qualify under ERISA, with respect to Executive employees,
as a plan of deferred compensation for a select group of management or
highly compensated employees.
Section 3.05. Elections by Participants Subject to Section
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16. All elections made under this Article III by Participants subject
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to Section 16 of the Exchange Act are "irrevocable" and will remain in
effect until another "irrevocable" election becomes effective.
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ARTICLE IV. DISTRIBUTION OF RESERVE ACCOUNT A,
RESERVE ACCOUNT B AND STOCK ACCOUNTS
Section 1.041. Distribution Election. (a) The distribution
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election (if any) made by a Participant under the Company's prior
deferred compensation program shall be his distribution election under
this Plan unless and until modified in accordance with Section 4.02
below.
(b) A new Participant shall, at the time he commences
participation in the Plan, make a distribution election with respect
to his Account. The election shall be in such form as the Secretary
may prescribe, and shall specify:
(i) Unless the Participant has
selected a later commencement
date, distribution of a
Participant's Accounts will
commence within 60 days
following the end of the
calendar year in which occurs
the Participant's retirement or
termination of employment or
service. For purposes of this
Plan, a participating Executive
who is disabled shall be deemed
to have retired or terminated at
the conclusion of benefits under
all disability income plans
sponsored by the Company or a
subsidiary or affiliate or to
which the Company or a
subsidiary or affiliate
contributes. Further, a
participating Executive who
ceases employment with the
Company or a subsidiary or
affiliate in connection with an
early retirement (reduction in
force) program sponsored by the
Company or a subsidiary or
affiliate shall, if a
participant in the Wisconsin
Public Service Administrative
Employees Retirement Plan, be
deemed to have retired upon
commencement of retirement
benefits under such plan.
(ii) Distributions will be made in 3,
6, 9, 12 or 15 annual
installments, as elected by the
Participant.
(iii) In the event of the
Participant's death, the
Participant's remaining
undistributed interest will be
distributed to the Beneficiary
designated by the Participant in
either a single sum payment or
in installments, as elected by
the Participant. If the
Participant has elected that
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death benefits be paid in a
single sum, the payment shall be
made no later than March 1
following the calendar year in
which occurs the Participant's
death. If the Participant has
elected that death benefits be
paid in installments, (A) any
installments previously
commenced to the Participant
shall continue to the
Beneficiary, and (B) if
installment distributions had
not commenced as of the date of
the Participant's death,
payments over the installment
period elected by the
Participant shall commence to
the Beneficiary no later than
March 1 following the calendar
year in which occurs the
Participant's death.
(c) A distribution election shall be deemed made only when it
is received by the Secretary, and shall remain in effect until
modified by the Participant in accordance with Section 4.02 below or
otherwise revoked in accordance with Plan rules.
Section 1.042. Modified Distribution Election. A Participant
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may from time to time modify his distribution election by filing a
revised distribution election, properly completed and signed, with the
Secretary. However, a revised distribution election will be given
effect only if the Participant remains employed by (or in the case of
a Director, continues service on the Board or the board of directors
of a subsidiary or affiliate) for twenty-four (24) consecutive months
following the date that the revised election is received by the
Secretary.
Section 1.043. Calculation of Annual Distribution Amount. (a)
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For any Participant who commenced distributions prior to January 1,
1996 under the terms of the prior deferred compensation program
maintained by Wisconsin Public Service Corporation, distribution will
continue to be calculated under the distribution method applicable to
such Participant at the time his distributions commenced.
(b) For any Participant whose distribution commencement date
is after December 31, 1995, the annual distribution amount will be
determined by aggregating the Participant's interest in Reserve
Account A, Reserve Account B and the Stock Account and dividing this
sum by the number of installment payments remaining to be made under
the distribution period selected by the Participant.
(i) The Participant's interest in
Reserve Account A and Reserve
Account B for any distribution
year shall be the balance in
such accounts (if any) as of
January 1 of that year.
(ii) The Participant's interest in
the Stock Account for any
distribution year shall equal
the number of WPS Resources
Stock Units credited to such
account on January 1 of the year
in which the distribution is
being made (disregarding any
fractional units) multiplied by
the closing price of WPS
Resources Stock on January 21 of
that year as reported in the
Wall Street Journal's New York
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Stock Exchange Composite
Transactions listing. If
January 21 falls on a Saturday,
Sunday or holiday, the
calculation will be made on the
immediately preceding business
day.
(c) The amount of any distribution will be charged pro-rata
against a Participant's Accounts.
Section 1.044. Form and Time of Distribution. (a) The
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portion of the annual distribution amount that is attributable to
Reserve Account A and/or Reserve Account B shall be distributed in
cash. The portion of the annual distribution amount that is
attributable to the Stock Account shall be distributed in cash and/or
whole shares of WPS Resources Stock as determined by the Compensation
Committee in its sole discretion. Subject to adjustment as provided
in paragraph (d) of this Section 4.04, the total number of authorized
but previously unissued shares of WPS Stock which may be distributed
to Participants pursuant to the Plan shall be one hundred thousand
(100,000), which number shall not be reduced by or as a result of
(i) any cash distributions pursuant to the Plan or (ii) the
distribution to Participants pursuant to the Plan of any outstanding
shares of WPS Stock purchased by or on behalf of the Trust.
(b) WPS Resources Stock distributed to a Participant shall be
distributed on January 22 (or if January 22 falls on a Saturday,
Sunday or holiday, the immediately following business day). For
distribution and tax reporting purposes, the value of WPS Resources
Stock distributed shall equal the number of shares distributed
multiplied by the closing price of WPS Resources Stock on January 21
(or if January 21 falls on a Saturday, Sunday or holiday, the
immediately preceding business day) of the year in which the
distribution is being made as reported in the Wall Street Journal's
New York Stock Exchange Composite Transaction listing. The cash
portion of any distribution will be made no later than March 1 of the
year for which the distribution is being made.
(c) The amount actually distributed to the Participant will
be reduced by applicable income tax withholding. Unless the
Participant has made a contrary election, income tax on the entire
annual distribution amount will be withheld from the cash portion of
the distribution, and WPS Resources Stock will be used to satisfy
withholding obligations only to the extent that the cash portion of
the distribution is insufficient for this purpose. In the case of a
Participant who is subject to Section 16 of the Securities Exchange
Act of 1934, the Participant's election must be received by the
Secretary at least six (6) months prior to the date on which the WPS
Resources Stock is distributed.
(d) In the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock
dividend, split-up, share combination or other change in the corporate
structure of the Company affecting WPS Stock, such adjustment shall be
made in the number and class of shares which may be distributed
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pursuant to the Plan as may be determined to be appropriate and
equitable by the Compensation Committee in its sole discretion.
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ARTICLE V. SPECIAL DEATH BENEFIT FOR PARTICIPANTS
WHO DIE WHILE MAKING VOLUNTARY AND MANDATORY DEFERRALS
Section 1.051. Eligibility. If an Executive who is employed
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by Wisconsin Public Service Corporation at the Vice President level or
above (excluding Assistant Vice Presidents) dies prior to attainment
of age sixty-five (65) and while employed by Wisconsin Public Service
Corporation, and if at the time of the Executive's death Voluntary or
Mandatory Deferrals were being made by or on behalf of the Executive,
then a special death benefit shall be paid to the Executive's
Beneficiary. This special death benefit is in addition to any other
death benefit payable under the Plan.
Section 1.052. Calculation of Special Death Benefit Amount.
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The special death benefit shall be an amount equal to the sum of the
(a), (b), (c) and (d) below.
(a) The difference between (i) the amount of Voluntary and
Mandatory Deferrals that would have been made by or on behalf of the
Executive during the month in which occurs the Executive's death,
assuming, for this purpose that the Participant had lived, and
(ii) the amount of Voluntary and Mandatory Deferrals actually made
during such month;
(b) The product obtained by multiplying (i) the amount of
Voluntary and Mandatory Deferrals made by or on behalf of the
Executive during the month prior to the month in which occurs the
Executive's death, and (ii) the number of full calendar months,
inclusive, from the month following the month in which occurs the
Executive's death to the month preceding the month in which the
Executive would have attained age sixty-five (65) had he lived;
(c) In the event the Executive's birthday is other than the
first day of a calendar month, for the month in which the Executive
would have attained age sixty-five (65), the product obtained by
multiplying (i) the amount of Voluntary and Mandatory Deferrals made
by or on behalf of the Executive during the month prior to the month
in which occurs the Executive's death, and (ii) a fraction, the
numerator of which is the number of days in such month prior to the
Executive's sixty-fifth (65th) birthday and the denominator of which
is the total number of days in the month;
(d) A projected earnings factor equal to the amount of
interest equivalent that would have accumulated on the amounts
described in (a), (b) and (c) above. The projected earnings factor
shall be calculated using the interest equivalent rate that was in
effect under Reserve Account B for the month prior to the month in
which occurs the Executive's death The calculation shall assume that
the Voluntary and Mandatory Deferrals described in (a), (b) and (c)
above were credited to Reserve Account B on a monthly basis assuming
that the Executive had lived and continued to make Voluntary and
Mandatory Deferrals. The interest equivalent shall be compounded in
the same manner as the Executive's actual Reserve Account balance,
i.e., the annual interest equivalent, calculated as of the end of each
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Plan Year, will be the sum (on a non-compounded basis) of the
attributed earnings for each month during the year based on the
Account balance as of the last day of the month.
Section 5.03. Payment of Special Death Benefit. (a) The
-----------------------------------------------
special death benefit calculated in accordance with Section 5.02 above
shall be paid to the Executive's Beneficiary in fifteen (15) annual
installments, with the first installment commencing within sixty (60)
days of the Executive's death. The benefit calculated under Section
5.02 is a fixed amount which does not accrue earnings or interest
equivalent on the undistributed balance.
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ARTICLE VI. SUPPLEMENTAL RETIREMENT BENEFIT
Section 1.061. Supplemental Retirement Benefit. In the case
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of an Executive who is employed by Wisconsin Public Service
Corporation at the Vice President level or above (excluding Assistant
Vice Presidents), Wisconsin Public Service Corporation shall provide
the Executive with a supplemental retirement benefit if the Executive
retires from Wisconsin Public Service Corporation either:
(a) at age sixty (60) or later; or
(b) prior to age sixty (60) with the written approval of the
Board and the Chief Executive Officer of Wisconsin Public Service
Corporation.
Section 1.062. Amount of Supplemental Benefit. (a) The
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Company agree to pay to any Executive who qualifies for the
supplemental retirement benefit under Section 6.01 above a monthly
amount equal to the "applicable percentage" of the Executive's
"average monthly compensation".
(b) The "applicable percentage" shall be twenty percent (20%)
in the case of an Executive employed at the Senior Vice President
level or above, and ten percent (10%) in the case of an Executive
employed at the Vice President level.
(c) The Executive's "average monthly compensation" is the
Executive's "compensation", expressed on a monthly basis, during
whichever period of thirty-six (36) consecutive months of employment
produces the highest average. For this purpose, "compensation" shall
have the same meaning as under the Wisconsin Public Service
Corporation Administrative Employees' Retirement Plan with the
exception that (i) Voluntary Deferrals and Mandatory Deferrals made by
or on behalf of the Executive during the relevant period will be
included in the Executive's compensation and (ii) the compensation
limitation specified in Section 401(a)(17) of the Internal Revenue
Code shall not apply.
Section 1.063. Commencement and Duration of Supplemental
---------------------------------------------------------
Retirement Benefits. Monthly payments calculated in accordance with
- -------------------
Section 6.02 above will commence to the Executive with a payment for
the month following the month in which the Executive retires and shall
continue until the earlier to occur of (a) the Executive's death, or
(b) one hundred twenty (120) monthly payments have been made.
Section 1.064. Death Prior to Receipt of 120 Monthly Payments.
---------------------------------------------------------------
If the Executive dies after retirement but before receipt of 120
payments, Wisconsin Public Service Corporation shall pay to the
Participant's surviving spouse monthly payments equal to fifty percent
(50%) of the amount of the benefit that was being paid to the
Executive. This benefit will commence with a payment for the month
following the month in which occurs the death of the Executive and
shall continue until the earlier to occur of (a) the month in which
occurs the death of the surviving spouse, or (b) a total of one
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hundred twenty (120) monthly payments have been made to either the
Executive or the surviving spouse.
Section 6.05. Death Prior to Retirement. If the Executive
----------------------------------------
dies prior to retirement, Wisconsin Public Service Corporation shall
pay to the Participant's surviving spouse monthly payments equal to
fifty percent (50%) of the amount that would have been paid to the
Executive had he lived, but calculated without assuming any salary
increases. This benefit will commence with a payment for the month
following the month in which occurs the death of the Executive and
shall continue until the earlier to occur of (a) the month in which
occurs the death of the surviving spouse, or (b) one hundred twenty
(120) monthly payments have been made.
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ARTICLE VII. PROTECTION OF QUALIFIED RETIREMENT PLAN BENEFIT
Section 1.071. Retirement Plan Supplement. (a) In the case
-----------------------------------------
of an Executive who is employed by Wisconsin Public Service
Corporation, Wisconsin Public Service Corporation shall pay to an
Executive during his lifetime, and if applicable, to his surviving
spouse following the Executive's death, a monthly amount equal to the
difference between:
(i) The monthly benefit that would
have been payable to or on
behalf of the Executive under
the Wisconsin Public Service
Corporation Administrative
Employees' Retirement Plan
("Retirement Plan") had the
Executive's (A) compensation for
Retirement Plan purposes been
calculated prior to reduction
for Voluntary and Mandatory
Deferrals made to this Plan and
without regard to the
compensation limitation
described in Section 401(a)(17)
of the Code, and (B) benefit
been calculated without regard
to the maximum benefit
limitation described in Section
415 of the Internal Revenue
Code; and
(ii) The monthly benefit actually
payable to or on behalf of the
Executive under the Retirement
Plan.
(b) Payments under this Section 7.01 shall cease when all
benefits payable to or on behalf of the Executive under the Retirement
Plan are discontinued.
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ARTICLE VIII. RULES WITH RESPECT TO WPS RESOURCES STOCK
AND WPS RESOURCES STOCK UNITS
Section 1.081. Transactions Affecting WPS Resources Stock. In
-----------------------------------------------------------
the event of any merger, share exchange, reorganization,
consolidation, recapitalization, stock dividend, stock split or other
change in corporate structure affecting WPS Resources Stock,
appropriate adjustments shall be made to the WPS Resources Stock Units
(if any) credited to the Stock Account of each Participant.
Section 1.082. No Shareholder Rights With Respect to WPS
---------------------------------------------------------
Resources Stock Units. Participants shall have no rights as a
- ----------------------
stockholder pertaining to WPS Resources Stock Units credited to their
Stock Account. No WPS Resources Stock Unit nor any right or interest
of a Participant under the Plan in any WPS Resources Stock Unit may be
assigned, encumbered, or transferred, except by will or the laws of
descent and distribution. The rights of a Participant hereunder with
respect to any WPS Resources Stock Unit are exercisable during the
Participant's lifetime only by him or his guardian or legal
representative.
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ARTICLE IX. GENERAL PROVISIONS
Section 1.091. Administration. The Compensation Committee,
-------------------------------
with the assistance of the Secretary, shall administer and interpret
the Plan and supervise preparation of Participant elections, forms,
and any amendments thereto. Interpretation of the Plan shall be
within the sole discretion of the Compensation Committee and shall be
final and binding upon each Participant and Beneficiary. The
Compensation Committee, and the Secretary with respect to matters
assigned to him under this Plan or delegated to him by the
Compensation Committee, may adopt and modify rules and regulations
relating to the Plan as it deems necessary or advisable for the
administration of the Plan. If the Secretary shall also be a
Participant or Beneficiary, any determinations affecting the
Secretary's participation in the Plan shall be made by the
Compensation Committee.
Section 1.092. Compliance With Securities Exchange Act.
-------------------------------------------------------
Transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successor under the Securities
Exchange Act of 1934. The Plan shall be construed by the Compensation
Committee so that transactions under the Plan will be exempt from
Section 16 of the Exchange Act pursuant to regulations and
interpretations issued from time to time by the Securities and
Exchange Commission.
Section 1.093. Participant Rights Unsecured. (a) The right
---------------------------------------------
of a Participant or his Beneficiary to receive a distribution
hereunder shall be an unsecured claim, and neither the Participant nor
any Beneficiary shall have any rights in or against any amount
credited to his Account or any other specific assets of the Company or
any subsidiary or affiliate thereof. The right of a Participant or
Beneficiary to the payment of benefits under this Plan shall not be
assigned, encumbered, or transferred, except by will or the laws of
descent and distribution. The rights of a Participant hereunder are
exercisable during the Participant's lifetime only by him or his
guardian or legal representative.
(b) The Company may authorize the creation of a trust or
other arrangements to assist the Company in meeting the obligations
created under the Plan. However, any liability to any person with
respect to the Plan shall be based solely upon any contractual
obligations that may be created pursuant to the Plan. No obligation
of the Company or any subsidiary or affiliate thereof shall be deemed
to be secured by any pledge of, or other encumbrance on, any property
of the Company or any subsidiary or affiliate thereof. Nothing
contained in this Plan and no action taken pursuant to its terms shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company or a subsidiary or affiliate thereof
and any Participant or Beneficiary, or any other person.
Section 1.094. Income Tax Withholding. Subject to Section
--------------------------------------
4.04(c), no later than the date as of which an amount first becomes
includible in the gross income of the Participant for Federal income
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tax purposes, the Participant shall pay to the Company (or a
subsidiary or affiliate), or make arrangements satisfactory to the
Company (or a subsidiary or affiliate) regarding the payment of, any
Federal, state, local or foreign taxes of any kind required by law to
be withheld with respect to such amount.
Section 1.095. Establishment, Amendment or Termination of
----------------------------------------------------------
Plan. (a) The Plan will become effective on January 1, 1996 subject
- ----
to approval by a majority of the votes cast at a duly held meeting of
the Company's stockholders at which a quorum representing a majority
of all outstanding voting stock is, either in person or by proxy,
present and voting on the Plan.
(b) There shall be no time limit on the duration of the Plan.
The Board may, at any time, amend or terminate the Plan without the
consent of the Participants or Beneficiaries, provided, however, that
no amendment or termination may reduce any Account balance accrued on
behalf of a Participant based on deferrals already made, or divest any
Participant of rights to which he would have been entitled if the Plan
had been terminated immediately prior to the effective date of such
amendment. This Section shall not, however, restrict the right of the
Board to cause all Accounts to be distributed in the event of Plan
termination. In addition, no amendment may become effective until
stockholder approval is obtained if the amendment as it relates to
Participants subject to Section 16 of the Exchange Act would require
shareholder approval under Rule 16b-3 or any successor provision.
Section 1.096. Administrative Expenses. Costs of establishing
---------------------------------------
and administering the Plan will be paid by the Company or its
subsidiaries or affiliates.
Section 1.097. Effect on Other Employee Benefit Plans.
-------------------------------------------------------
Voluntary and mandatory Deferrals credited to a Participant's Account
under this Plan shall not be considered "compensation" for the purpose
of computing benefits under any qualified retirement plan maintained
by the Company or any subsidiary or affiliate thereof, but shall be
considered compensation for welfare benefit plans, such as life and
disability insurance programs sponsored by the Company.
Section 1.098. Successor and Assigns. This Plan shall be
--------------------------------------
binding upon and inure to the benefit of the Company and its
designated subsidiaries or affiliates, their successors and assigns
and the Participants and their heirs, executors, administrators, and
legal representatives.
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