CONECTIV
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
Revised as of
October 2008
CONECTIV
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
PREAMBLE
The principal objective of this Supplemental Executive
Retirement Plan is to ensure the payment of competitive level of
Retirement income in order to attract, retain and motivate selected
executives. The Plan is designed to provide a benefit
which, when added to other Retirement income of the executive, will
meet the objective described above. Eligibility for
participation in the plan shall be limited to executives who are
classified as directors or above, who are participants in the
Conectiv Deferred Income Plan, and other managers or executive are
selected by the Chief Executive Officer and approved by the
Personnel and Compensation Committee of the Board of
Directors. In order to be eligible for benefits under
this Plan on account of Service prior to employment by an Employer,
an executive must be (or have been) recruited into the position (or
for the position) as determined by the Committee. This
Plan is a successor to the Delmarva Power & Light Company
Supplemental Executive Retirement Plan, the Atlantic City Electric
Company Supplemental Executive Retirement Plan, Supplemental
Executive Retirement Plan - II, and Excess Benefit Retirement
Income Program. This Plan is effective January 1, 1999,
and is effective as to each Participant on the date he or she is
designated as such hereunder.
SECTION I
DEFINITIONS
1.1
“Actuarial Equivalent” or “Actuarial
Equivalence” shall mean the method and amount by which a
single life annuity benefit is converted to any other form of
benefit, or by which a single sum benefit is converted to any form
of annuity benefit, and shall be determined by using the
appropriate factors and methods as set forth in the Basic Plan as
of the date of determination.
1.2
“Affiliate” means any corporation,
partnership or other organization which, during any period of
employment of a Participant, was at least 50% controlled by the
Company or an affiliate of the Company.
1.3 “Basic
Plan” means the Conectiv Retirement Plan as set forth in the
Base Plan and the Cash Balance Sub-Plan.
1.4 “Basic
Plan Benefit” means the amount of benefit payable from the
Basic Plan to a Participant (a) in the form of an unreduced
straight life annuity, where the Participant’s benefit from
this Plan is payable in the form of an annuity; or (b) in the form
of a single lump sum, where the. Participant’s benefit from
this Plan is payable in the form of a lump sum.
1.5
“Beneficiary” means the person or persons
designated as the Participant’s beneficiary for purposes of
the Basic Plan or, for a Participant who is not a participant in
the Basic Plan, the person or persons designated as the
Participant’s beneficiary for purposes of this Plan on a form
provided for such purpose and filed with the Agent designated in
Section VII.
1.6
“Change in Control” shall mean the first to
occur, after the effective date, of any of the
following:
(a) If
any Person is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act), directly
or indirectly, of securities of Conectiv (not including in the
securities beneficially owned by such Person any securities
acquired directly from Conectiv or its subsidiaries) representing
25% or more of either the then-outstanding shares of common stock
of Conectiv or the combined voting power of Conectiv’s then
outstanding securities; or
(b) If
during any period of 24 consecutive months during the existence of
the Plan commencing on or after the effective date, the individuals
who, at the beginning of such period, constitute the Board (the
“Incumbent Directors”) cease for reason other than
death to constitute at least a majority thereof; provided that a
director who was not a director at the beginning of such 24-month
period shall be deemed to have satisfied requirement (and be an
Incumbent Director) if such director was elected by, or on the
recommendation of or with the approval of, at least two-third of
the directors who then qualified as Incumbent Directors
either
actually
(because they were directors at the beginning of such 24-month
period) or by prior operation of this Section 1.6; or
(c) The
consummation of a merger or consolidation of Conectiv with any
other corporation other than (i) a merger or consolidation which
would result in the voting securities of Conectiv outstanding
immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent
thereof) at least 60% of the combined voting power of the voting
securities of Conectiv or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation,
or(ii) a merger or consolidation effected to implement a
recapitalization of Conectiv (or similar transaction) in which no
Person is or becomes the beneficial owner, as defined in Section
1.6(a), directly or indirectly, of securities of Conectiv (not
including in the securities beneficially owned by such Person any
securities acquired directly from Conectiv or its subsidiaries)
representing 40% or more of either the then-outstanding shares of
common stock of Conectiv or the combined voting power of
Conectiv’s then- outstanding securities; or
(d) The
stockholders of Conectiv approve a plan of complete liquidation or
dissolution of Conectiv, or there is consummated an agreement for
the sale or disposition by Conectiv of all or substantially all of
Conectiv’s assets, other than a sale or disposition by
Conectiv of all or substantially all of Conectiv’s assets to
an entity, at least 60% of the combined voting power of the voting
securities of which are owned by Persons in substantially the same
proportion as their ownership of Conectiv immediately prior to such
sale.
Upon the occurrence of a Change in Control as provided above,
no subsequent event or condition shall constitute a Change in
Control for purposes of the Plan, with the result that there can be
no more than one Change in Control hereunder.
For purposes of this Section, the term “Person”
shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include: (i) Conectiv or any of its
subsidiaries; (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of Conectiv or any of subsidiaries;
(iii) an underwriter temporarily holding securities pursuant to an
offering of such securities; (iv) a corporation owned directly or
indirectly by the stockholders of Conectiv substantially the same
proportions as their ownership of stock of Conectiv; or (v) with
respect to any particular Participant, such Participant or any
“group” (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act) which includes such
Participant).
1.7 “Committee”
means the Personnel and Compensation Committee of the Board of
Directors of the Company, which has been given authority by the
Board of Directors to administer this Plan.
1.8 “Code”
means the Internal Revenue Code of 1986, as amended.
1.9 “Company”
means Conectiv and any successor thereto.
1.10 “Compensation”
means any amount paid to a Participant as salary or bonus,
including pre-tax contributions and elective contributions that are
not includible in gross income under sections 125, 402(a)(8) or
402(h) of the Code, and all amounts deferred pursuant to the
Conectiv Deferred Income Plan in the year deferred (up to 50% of
Compensation as calculated prior to such deferral), but excluding
(a) contributions the Company makes to any other benefit plan; (b)
any amounts paid in the form of fringe benefits (cash or non-cash),
expenses, or welfare benefits, even though such amounts may be
taxable for federal income tax purposes; (c ) any amounts paid from
the Conectiv Deferred Income Plan; and (d) any amounts paid or
deferred in connection with stock grants, stock options, or
payments based on stock performance such as stock appreciation
rights or phantom stock awards.
1.11 “Disabled”
means a mental or physical condition which qualifies a Participant
for benefits under the Employer’s long-term disability
plan.
1.12 “Effective
Date” means January 1, 1999.
1.13 “Employee”
means any individual employed by an Employer, provided, however,
that to qualify as an Employee for purposes of the Plan, the
individual must be a member of a group of “key management or
other highly compensated employees” within the meaning of
Sections 201, 301 and 401 of ERISA; and provided further than an
individual shall not be eligible to become or remain a Participant
if (a) he or she is not on an employee payroll of an Employer; (b)
he or she has entered into a written agreement with an Employer
which provides that he or she shall not participate in the Plan; or
(c) he or she is in a group of employees that is excluded from the
Plan pursuant to a declaration by the Employer with respect to the
Employer’s adoption of the Plan or any amendment
thereto.
1.14 “Employer”
means the Company or an Affiliate that has adopted this Plan for
its Employees.
1.15 “ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
1.16 “Other
Retirement Income” means, as determined by the Committee in
its discretion, retirement income payable from any other retirement
plan whether or not such plan was maintained by, or contributed to,
by the Company.
1.17 “Participant”
means an Employee of an Employer who is (a) employed at a level of
director or above, (b) a participant in the Conectiv Deferred
Income Plan who defers income pursuant thereto, or (c) recommended
by the Chief Executive Officer and designated as a Participant by
the Committee. An Employee shall become a Participant in
the Plan as of the later of (a) the Effective Date of this Plan,
(b) the date he or she becomes an Employee, or (c) in the case of a
person who becomes an Employee pursuant to a resolution of the
Committee, the date his or her designation is individually approved
by, and is specifically named in the resolution of, the Committee
for inclusion in the Plan.
1.18 “Plan”
means the Conectiv Supplemental Executive Retirement
Plan.
1.19 “Prior
Plan” means the Delmarva Power & Light Company
Supplemental Executive Retirement Plan, the Atlantic City Electric
Company Supplemental Executive Retirement Plan, the Atlantic City
Electric Company Supplement Executive Retirement Plan II, and the
Atlantic City Electric Company Excess Benefit Retirement Income
Program. Each such Prior Plan is hereby terminated with
respect to any person employed by the Company or an Affiliate on or
after the Effective Date, and any such person shall receive
supplemental retirement benefits only under this Plan or under the
Supplemental Executive Retirement Plan sponsored by Delmarva
Capital Investments, Inc.
1.20 “Retirement”
means the termination of a Participant’s employment with an
Employer on one of the Retirement dates specified in Paragraph
2.2.
1.21 “SERP
Payable Cash Balance” means the lump sum benefit payable from
the Plan as defined in Section III, Sub-section 3.1, and may
include an Initial SERP Payable Cash Balance credited pursuant to
Section 1.22.
1.22 “Service”
means a Participant’s credited years of Service as defined in
the Basic Plan, plus any other years of service credited to such
Participant prior to age 65 pursuant to an employment agreement
with an Employer or pursuant to a resolution of the
Committee. For a Participant who is not a participant in
the Basic Plan, “Service” shall mean the actual years
and months of employment of such participant by an Employer, plus
any additional years and months of Service credited to such
Participant prior to age 65 pursuant to an employment agreement
with an Employer or pursuant to a resolution of the
Committee. Effective with the Effective Date, the
Committee may grant such Participant an Initial SERP Payable Cash
Balance in lieu of such prior Service, and grants of prior Service
made prior to the Effective Date may be converted to an Initial
SERP Payable Cash Balance. P
1.23 “Surviving
Spouse” means the spouse of a Participant who is legally
married to the Participant at the time of the Participant’s
Retirement, or death if still employed by an Employer or an
Affiliate.
1.24 “Termination”
means the termination of the Participant’s employment with an
Employer or an Affiliate, and shall occur at the commencement of
any severance pay unless otherwise specified in a written agreement
relating to such severance pay.
SECTION II
ELIGIBILITY FOR
BENEFITS
2..1 A
Participant will be eligible for benefits under the Plan
if
(a) the
Participant’s Basic Plan Benefit is reduced by reason of the
limitation on the maximum benefit payable under §415, or
successor provisions, of the Code, or
(b) the
Participant’s Basic Plan Benefit is reduced by reason of the
limitation on compensation under §401(a)(17), or successor
provisions, of the Internal Revenue Code of 1986, as amended;
or
(c) the
Participant has deferred Compensation pursuant to the Conectiv
Deferred Income Plan; or
(d) the
Participant has received a grant of Service prior to employment
with an Employer or an Initial SERP Payable Cash Balance pursuant
to the terms of Section 1.22.
2..2 Each
Participant is eligible to retire and receive a benefit under this
Plan beginning on one of the following dates:
(a) “Normal
Retirement Date,” which is the first of the month coincident
with or next following the Participant’s sixty-fifth
(65 th
) birthday after attaining five (5)
years of Service with an Employer (not including pre-employment
service granted pursuant to Section 1.22.
(b) “Early
Retirement Date,” which is the date the Participant elects to
retire after attaining age fifty-five (55) with fifteen (15) years
of service or attaining age sixty (60) with twenty (20) years of
service.
(c) “Deferred
Retirement Date,” which is the date the Part
