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EXHIBIT (10)-2
WISCONSIN ENERGY CORPORATION
AMENDED NON-QUALIFIED TRUST
THIS AMENDED AGREEMENT made this 26th day of January 1996, by and
between WISCONSIN ENERGY CORPORATION ("Company") and FIRSTAR TRUST COMPANY
("Trustee");
WHEREAS, Company has adopted the nonqualified deferred compensation
Plan(s) as listed in Appendix A;
WHEREAS, Company and certain of its subsidiaries have incurred or expect
to incur liability under the terms of such Plan(s) with respect to the
individuals participating in such Plan(s);
WHEREAS, Company has previously established a trust (hereinafter called
"Trust") and contributed to the Trust assets to be held therein, subject to
the claims of the creditors of the Company and all contributing subsidiaries,
in the event of Insolvency of the Company or any contributing subsidiary, as
herein defined, until paid to Plan participants and their beneficiaries in
such manner and at such times as specified in the Plan(s);
WHEREAS, Company wishes to amend the Trust to permit Trust assets to be
invested in Company stock and to make certain other Trust changes;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Plan(s) as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of
1974;
WHEREAS, it is the intention of Company and certain of its subsidiaries
to make contributions to the Trust to provide a source of funds to assist in
the meeting of the liabilities under the Plan(s);
NOW, THEREFORE, the parties do hereby amend the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
Section 1. ESTABLISHMENT OF TRUST
(a) Company has previously contributed amounts to the Trust to be
held, administered and disposed of by Trustee as provided in this Trust
Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is
the grantor, within the meaning of subpart E, part 1, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company or any of its subsidiaries and
shall be used exclusively for the uses and purposes of Plan participants and
general creditors as herein set forth. Plan participants and their
beneficiaries shall have no preferred claim on, or any beneficial ownership
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interest in, any assets of the Trust. Any rights created under the Plan(s)
and this Trust Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against Company. Any assets held by the
Trust will be subject to the claims of general creditors of the Company and
any contributing subsidiary under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in Trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee
as provided in this Trust Agreement. Neither Trustee nor any plan participant
or beneficiary shall have any right to compel such additional deposits.
(f) Upon a Change of Control Company shall, as soon as possible, but
in no event longer than 60 days following the Change of Control, as defined
herein, make an irrevocable contribution to the Trust in an amount that is
sufficient to pay each plan participant or beneficiary the benefits to which
plan participants or their beneficiaries would be entitled pursuant to the
terms of the plan(s) as of the date on which the Change of Control occurred.
Section 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each Plan
participant (and his or her beneficiaries), that provides a formula or other
instructions acceptable to Trustee for determining the amounts so payable, the
form in which such amount is to be paid (as provided for or available under
the Plan(s)), and the time of commencement for payment of such amounts.
Except as otherwise provided herein, Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such Payment Schedule.
Trustee shall make provision for the reporting and withholding of any federal,
state or local taxes that may be required to be withheld with respect to the
payment of benefits pursuant to the terms of the Plan(s) and shall pay amounts
withheld to the appropriate taxing authorities or determine that such amounts
have been reported, withheld and paid by Company.
(b) The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plan(s) shall be determined by Company or such party as
it shall designate under the Plan(s), and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan(s).
(c) Company may make payment of benefits directly to Plan participants
or their beneficiaries as they become due under the terms of the Plan(s).
Company shall notify Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with
the terms of the Plan, Company shall make the balance of each such payment as
it falls due. Trustee shall notify Company where principal and earnings are
not sufficient.
Section 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY
WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan participants and
their beneficiaries if Company or any contributing subsidiary is Insolvent.
Whenever the term "Company" is used in this Section 3, it shall also be deemed
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to mean any contributing subsidiary of the Company. Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (i) Company is
unable to pay its debts as they become due, or (ii) Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of
Company shall have the duty to inform Trustee in writing of Company's
Insolvency. If a person claiming to be a creditor of Company alleges in
writing to Trustee that Company has become Insolvent, Trustee shall
determine whether Company is Insolvent and, pending such determination,
Trustee shall discontinue payment of benefits to Plan participants or
their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency,
or has received notice from Company or a person claiming to be a
creditor alleging that Company is Insolvent, Trustee shall have no duty
to inquire whether Company is Insolvent. Trustee may in all events rely
on such evidence concerning Company's solvency as may be furnished to
Trustee and that provides Trustee with a reasonable basis for making a
determination concerning Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Plan participants or
their beneficiaries and shall hold the assets of the Trust for the
benefit of Company's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Plan participants or their bene-
ficiaries to pursue their rights as general creditors of Company with
respect to benefits due under the Plan(s) or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of this
Trust Agreement only after Trustee has determined that Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan(s) for the
period of such discontinuance, less the aggregate amount of any payments made
to Plan participants or their beneficiaries by Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
Section 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company shall have no right or power to direct Trustee to return
to Company or to divert to others any of the Trust assets before all payment
of benefits have been made to Plan participants and their beneficiaries
pursuant to the terms of the Plan(s).
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Section 5. INVESTMENT AUTHORITY.
(a) Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by Company. All rights associated with
assets of the Trust shall be exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by or rest with plan
participants.
Company shall have the right at anytime, and from time to time in its sole
discretion, to substitute assets of equal fair market value for any asset held
by the Trust. This right is exercisable by Company in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary capacity.
(b) Subject to (a) above, Trustee shall invest and reinvest the
principal and income of the Trust fund in any and all common stocks, preferred
stocks, bonds, notes, debentures, mortgages, equipment trust certificates,
investment trust certificates, common, collective or group trust investments
or mutual fund investments (including any such trusts or funds as may be
established by Trustee or any of its affiliates), real and personal property
wherever situated, and in such other property, investments and securities of
any kind, class or character as Trustee may deem suitable for the Trust.
Trustee shall have the power, in its sole discretion, to do all such acts,
execute all such instruments, take all such proceedings and exercise all
rights and privileges with respect to any property or asset constituting a
part of the Trust fund as if Trustee were the absolute owner thereof.
(c) Notwithstanding any other provision of this Trust, Company, by
action of its Board or Executive Committee, may from time to time appoint one
or more independent professional investment advisors (each of which is
hereinafter called an "Investment Advisor") with respect to the total or any
portion of the Trust fund. Trustee shall not be required to be a party to any
agreement appointing an Investment Advisor except in the case where Company
requests Trustee to enter into an agency and custody agreement with an
Investment Advisor which will also be the depository and custodian of the
Trust fund assets allocated to its management; provided further that the terms
and conditions of appointment, authority, retention and removal of Investment
Advisor shall be the sole responsibility of Company. Investment Advisor shall
have and exercise all of the investment powers reserved to Trustee under this
Trust Agreement during the period of such appointment. Upon receipt of
written notice from Company of the appointment of such Investment Advisor,
Trustee shall perform such custodial and ministerial acts relating to
investments as may be required to carry out the directions of Investment
Advisor and the administration of such portion of the Trust fund for which an
advisor is appointed, but shall be relieved of all responsibility for
investment or failure to invest in accordance with this Trust Agreement for
such portion of the Trust fund during the period of such appointment, except
that Trustee may invest and reinvest income and principal cash in
U.S. treasury bills, commercial paper, or other short-term investments,
including in interests in any common, collective or group trust fund or mutual
fund that is created and maintained by Trustee or any of its affiliates from
time to time for the collective short-term investment of Trust cash reserves,
pending receipt of directions as to the investment or disposition of such
cash.
Section 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
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Section 7. ACCOUNTING BY TRUSTEE.
With respect to the Trust fund and each Plan, Trustee shall keep or
cause to be maintained accurate and detailed accounts of all investments,
receipts and disbursements and other transactions hereunder, and all accounts,
books and records relating thereto shall be open to inspection and audit at
all reasonable times by any person or persons designated by Company. Trustee
shall file with Company annually or more frequently if requested a written
report setting forth all investments, receipts and disbursements, and other
transactions effected by them to the date covered by the report, and showing
all cash and other property held at the end of such period. At the request of
Company, Trustee shall establish and maintain separate records on
contributions made hereunder by Company and any contributing subsidiary. Such
funds may be commingled, invested and reinvested hereunder in all respects as
a commingled single fund, but Trustee, to the extent it is maintaining
separate records hereunder as to the contributing entity, shall always
maintain separate accounts within the Trust showing the value of the separate
interests of each contributing entity, on a pro rata basis.
Section 8. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall have no duty to review or recommend the sale,
retention or other disposition of any asset purchased or retained at the
direction of Investment Advisor, nor shall Trustee have any personal liability
or responsibility for any loss to or depreciation of such portion of the Trust
fund for which an advisor is appointed occasioned by reason of the purchase,
sale or retention of any asset in accordance with the direction of Investment
Advisor, or by reason of not having sold such asset so purchased or retained
in the absence of any direction from Investment Advisor to make such sale.
All directions given to Trustee by Investment Advisor, including broker's con-
firmations, shall be given in writing or given orally and immediately
confirmed in writing. Company shall indemnify and hold Trustee harmless from
and against any claim, loss or expense (including reasonable counsel fees)
arising out of anything done or omitted by Trustee in reliance on the
directions (or the absence of any directions) of Company or any Investment
Advisor appointed under Section 5(c) above.
(b) Trustee may consult with legal counsel, who may be counsel for
Company or in the employ of Company, in respect to any of its rights, duties
and obligations hereunder and shall be fully protected in acting or refraining
from acting in accordance with the advice of such counsel.
(c) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(d) Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as a asset of the
Trust, Trustee shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to
any person the proceeds of any borrowing against such policy.
(e) Notwithstanding any powers granted to Trustee pursuant to this
Trust Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
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Section 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative and Trustee's fees and expenses as
shall be agreed to from time to time by Company. If not so paid, the fees and
expenses shall be paid from the Trust.
Section 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective 60 days after receipt of such notice unless Company and
Trustee agree otherwise.
(b) Trustee may be removed by Company on 60 days' notice or upon
shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 120 days after
receipt of notice of resignation removal or transfer, unless Company extends
the time limit.
(d) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. If no such appointment
has been made, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
Section 11. APPOINTMENT OF SUCCESSOR.
If Trustee resigns or is removed in accordance with Section 10(a) or (b)
hereof, Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law,
as a successor to replace Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by Company or the successor
Trustee to evidence the transfer.
Section 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan(s) or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1(b)
hereof.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan(s). Upon termination of the Trust any
assets remaining in the Trust shall be returned to Company.
(c) Upon written approval of participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan(s), Company may
terminate this Trust prior to the time all benefit payments under the Plan(s)
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have been made. All assets in the Trust at termination shall be returned to
Company.
Section 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at law or
in equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of Wisconsin and of the United States of America.
(d) For purposes of this Trust, Change of Control shall mean: the
occurrence of any of the following events, as a result of one transaction or a
series of transactions:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding Company,
its affiliates and any qualified or non-qualified plan maintained by
Company or its affiliates), becomes the "beneficial owner" (as defined
in Rule 13d-3 promulgated under such Act), directly or indirectly, of
securities of Company representing more than 20% of the combined voting
power of Company's then outstanding securities;
(2) 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;
(3) 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 Company;
(4) 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
(5) the Board determines in its sole and absolute discretion
that there has been a change in control of Company.
These "Change in Control" provisions shall apply to successive Changes
in Control on an individual transaction basis.
Notwithstanding any of the other provisions of this Trust, none of the
transactions contemplated by the Agreement and Plan of Merger by and among
Northern States Power Company, Wisconsin Energy Corporation, Northern Power
Wisconsin Corp., and WEC Subcorp., dated as of April 28, 1995 shall constitute
a Change in Control for purposes of the Trust.
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Section 14. EFFECTIVE DATE.
The effective date of this Amended Trust Agreement shall be January 26,
1996.
WISCONSIN ENERGY CORPORATION
By: /s/ Xxx Xxxxx Xxxxx
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Xxx Xxxxx Xxxxx
Assistant Secretary
Attest: /s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
FIRSTAR TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President
Attest: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Asst. Secretary
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APPENDIX A
TO WISCONSIN ENERGY CORPORATION
EXECUTIVE NON-QUALIFIED TRUST
The nonqualified deferred compensation Plans referred to on page 1 of
the above Trust are identified as follows:
1. Wisconsin Energy Corporation Executive Deferred Compensation Plan.
2. Wisconsin Energy Corporation Supplemental Executive Retirement
Plan.
3. Wisconsin Energy Corporation Directors' Deferred Compensation
Plan.
4. Various individual supplemental benefit letter agreements more
particularly identified as follows:
a. Wisconsin Energy Corporation ("WEC") letter to Xx. X. X.
Xxxxx, dated April 26, 1995.
b. Wisconsin Electric Power Company ("WE") letter to Xx. X. X.
Xxxxx, dated November 21, 1994.
c. Wisconsin Natural Gas Company ("WN") letter to Xx. X. X.
Xxxxxx, dated April 1, 1986.
d. WEC letter to Mr. X. X. Boston, dated June 15, 1995.
e. WE letter to Xx. X. X. Xxxx, dated November 21, 1994.
f. WE letter to Xx. Xxx Xxxxxxxx, dated April 29, 1976.
g. Release Agreement between WN and Xx. X. X. Xxxx dated
February 2, 1994.
h. WN letter to Xx. X. X. Xxxx, dated December 14, 1990 and
Release Agreement between WN and Xx. Xxxx dated February 2,
1994.
i. WE letter to Xx. X. X. Xxxxxx, dated December 14, 1990.
j. Special Employment, Retirement Benefit and Release Agreement
between WE and Xx. X. X. Xxxxxx dated May 21, 1993.
k. Retirement Agreement between WE and Xx. X. X. Xxxxx, dated
January 15, 1991.
l. Release Agreement between WN and M. E. Xxxxxx dated
February 9, 1994.
m. WE letter to Mr. X. X. Speaker, dated November 21, 1994.
n. Retirement and Release Agreement between WE and
Xx. X. X. Xxxxxxxxxx, dated December 17, 1991.
o. Release Agreement between WEC and Xx. Xxxxx, dated April 19,
1995.
