EXHIBIT B-4
AMENDMENT
TO
AGREEMENT FOR PURCHASE AND SALE OF STOCK
THIS AMENDMENT (the "Amendment") to that certain Agreement for
Purchase and Sale of Stock dated as of August 24, 2000 (the "Agreement") by and
between Consolidated Water Power Company, a Wisconsin corporation ("Seller") and
Wisconsin Public Service Corporation, a Wisconsin corporation ("Buyer") is
entered into as of December 22, 2000 by and among Seller, Buyer, Stora Enso
North America Corp., a Wisconsin corporation ("SENA") and Wisconsin River Power
Company (`WRPCo").
WHEREAS, the Seller and Buyer desire to amend the Agreement to
conform the Agreement to the provisions of the Wisconsin River Power Company
Power Purchase Contract dated December 12, 2000, to provide for an adjustment of
the Purchase Price under the Agreement and by providing for continued retirement
and benefit plan coverage for the union WRPCo Company employees and related
matters.
NOW, THEREFORE, in consideration of the premises and the
promises herein contained, the parties agree as set forth below.
1. The Purchase Price will be increased by $215,512.00 and the
Buyer shall pay such additional amount to Seller at Closing.
2. Paragraph (f) of Section 1.3 of the Agreement hereby is
amended in its entirety to read as follows:
(f) An executed agreement extending, as to the Seller, the
Amended and Restated Power Purchase Contract made as of September 1,
1985 by and among Seller, Buyer and Wisconsin Power and Light Company
(the "Power Contract") for a period of twelve years from the later of
the date of Closing or the effective date approved by the Federal
Energy Regulatory Commission and providing for Seller's continued
enjoyment during that period of the benefits (subject to Seller's
continued obligations) now provided by the Power Contract and including
Seller's agreement that it will accept increases in the cost structure
under the Power Contract arising out of relicensing activities which
are in process as of December 31 2000 provided that Seller shall have
the opportunity to intervene in the relicensing process with respect to
issues which result in the increase;
3. SENA will continue to provide employee retirement and
welfare benefit plan coverage to the same extent and on the terms and conditions
prevailing on the date of Closing for all WRPCo union employees from the date of
Closing to March 31, 2001, or such earlier date as WRPCo assumes such coverage
obligation.
4. WRPCo will reimburse SENA for the cost of providing the
benefits referred to in Section 3 of this Amendment determined on the basis for
determining such costs
prevailing at August 31, 2000, from the date of Closing to the actual dates of
transition to other employee retirement and welfare benefit plan coverage, but
in no event for any period after March 31, 2001.
5. The Purchase Price will be adjusted to reflect changes in
the WRPCo pension assets and liabilities and retiree health assets and
liabilities between August 31, 2000, and March 31, 2001. If the net result of
such changes is an increase in the net book value of the Stock, Buyer will
promptly following the determination of such March 31, 2001 pension assets and
liabilities and retiree health assets and liabilities pay to Seller an amount
equal to such increase and if the net result of such changes is a decrease in
the net book value of the Stock, Seller will promptly after such determination
pay to Buyer an amount equal to such decrease. The following principles shall
govern the determination of such Purchase Price adjustment:
(a) The pension Projected Benefit Obligation ("PBO")
liability reflected on the WRPCo August balance sheet was
calculated on a Financial Accounting Standard No. 87
("FAS 87") accounting basis using an 7.75% discount rate
and reflects liability for all active, deferred vested
and retired plan participants. The final WRPCo pension
PBO liability will be calculated as of March 31, 2001
(using employee age and service as of March 31, 2001),
will be calculated on a FAS 87 accounting basis using a
7.75% discount rate and such other actuarial assumptions
as were used for purposes of determining the pension PBO
liability on the WRPCo August 31, 2000 balance sheet and
will include only active WRPCo employees. The
Consolidated Employees' Retirement Plan ("CERP") will
retain liability for all deferred vested and retired
WRPCo employees.
(b) The pension assets reflected on the WRPCo August 31, 2000
balance sheet were calculated on a FAS 87 accounting
basis and include all active, deferred vested and retired
plan participants asset allocations. The assets reflected
on the WRPCo August 31, 2000 balance sheet for WRPCo
employees were an accounting allocation only, since the
assets are held by an overall pension trust for all
employees and employers who participate in the CERP. The
final WRPCo pension assets will be calculated as of March
31, 2001 on the same basis used to calculate pension
benefits for the WRPCo August 31, 2000 balance sheet and
will include only assets allocable to WRPCo active plan
participants.
(c) The retiree health liability stated on the WRPCo August
31, 2000 balance sheet was calculated on a FAS 87
accounting basis using a 7.75% discount rate and includes
liability for all active, deferred vested and retired
plan participants. The final WRPCo retiree health
liability will be calculated as of March 31, 2001 (using
employee age and service as of March 31, 2001), will be
calculated on a FAS 87 accounting basis using a 7.75%
discount rate and such other actuarial assumptions as
were used for purposes of determining the retiree health
liability on the
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WRPCo August 31, 2000, balance sheet and will include
only active WRPCo employees. SENA will retain liability
for all deferred vested and retired WRPCo employees.
(d) The retiree health assets reflected on the WRPCo August
31, 2000 balance sheet were calculated on a FAS 87
accounting basis and include all active, deferred vested
and retired plan participants' asset allocations. No
assets will be transferred form the Voluntary Employee
Beneficiary Association "VEBA") trust to fund this
liability, the retiree health liability for active WRPCo
plan participants will be transferred to WRPCo as an
unfunded liability and the final WRPCo retiree health
assets value shall be zero.
6. As soon as administratively feasible on or after March
31, 2001, SENA shall cause the trustees of the CERP, and the related trust, to
make a trust to trust transfer to the new defined benefit pension plan ("New
Plan") as designated for the WRPCo union employees in an amount equal to the
value of pension benefits accrued through March 31, 2001 for all WRPCo active
union employees. In compliance with Section 414(1) of the Internal Revenue Code,
SENA's actuary will calculate the amount of the pension asset transfer using
Pension Benefit Guaranty Corporation ("PBGC") interest rate and mortality
assumptions in effect as of March 31, 2001 for the standard termination of a
single employer ("Asset Transfer Amount"). SENA's actuary will use a retirement
age assumption of 65 years. Seller agrees to cause the trustees of the CERP and
the related trusts, to transfer assets to the New Plan equal to the Asset
Transfer Amount effective as of March 31, 2001. SENA and WRPCo agree to comply
with all rules and procedures established by the Internal Revenue Service and
the PBGC with respect to the assumption of such liability and the transfer of
such assets.
7. All capitalized terms used in this Amendment which are
not defined herein shall have the respective meanings specified in the
Agreement.
8. This Amendment shall be construed in connection with and
as part of the Agreement.
9. This Amendment may be executed in counterparts, each of
which shall constitute one and the same instrument.
10. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date above specified.
CONSOLIDATED WATER POWER COMPANY
By:
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WISCONSIN PUBLIC SERVICE CORPORATION
By:
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STORA ENSO NORTH AMERICA CORP.
By:
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WISCONSIN RIVER POWER COMPANY
By:
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