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SUPPLEMENTAL RETIREMENT PLAN

Addendum or Modifications

SUPPLEMENTAL RETIREMENT PLAN | Document Parties: INTEGRYS ENERGY GROUP, INC. | INTEGRYS ENERGY GROUP, INC | WPS Resources Corporation You are currently viewing:
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INTEGRYS ENERGY GROUP, INC. | INTEGRYS ENERGY GROUP, INC | WPS Resources Corporation

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Title: SUPPLEMENTAL RETIREMENT PLAN
Governing Law: Illinois     Date: 9/22/2010
Industry: Electric Utilities     Sector: Utilities

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Exhibit 10.2


 

INTEGRYS ENERGY GROUP, INC.

 

PENSION RESTORATION AND

 

SUPPLEMENTAL RETIREMENT PLAN

 

 

 

As Amended and Restated Effective January 1, 2011

 

 

 

 


 

 

TABLE OF CONTENTS

 

 

 

 

 

  Page

 

 

 

  ARTICLE I. DEFINITIONS AND CONSTRUCTION

 2

 

 Section 1.01. Definitions.

 2

 

 Section 1.02. Construction and Applicable Law.

 9

 

 

 

  ARTICLE II. PAYMENT ELECTIONS

 10

 

 Section 2.01. General Rules.

 10

 

 Section 2.02. Participant Payment Election.

10

 

 

 

  ARTICLE III. PENSION RESTORATION BENEFIT

12 

 

 Section 3.01. Eligibility.

12 

 

 Section 3.02. Pension Restoration Benefit Formula.

12 

 

 Section 3.03. Distribution of Single Sum Benefits.

13 

 

 Section 3.04. Distribution of 180 Month Period Certain Installment Benefit.

14 

 

 Section 3.05. Distribution of Annuity Benefits.

15 

 

 Section 3.06. Death Benefits.

18 

 

 

 

  ARTICLE IV. SUPPLEMENTAL RETIREMENT BENEFIT

20 

 

 Section 4.01. Eligibility.

20 

 

 Section 4.02. Final Average Earnings.

20 

 

 Section 4.03. Supplemental Retirement Benefit Formula.

21 

 

 Section 4.04. Distribution of Single Sum Benefits.

23 

 

 Section 4.05. Distribution of 180 Month Period Certain Installment Benefit.

24 

 

 Section 4.06. Distribution of Annuity Benefits.

25 

 

 Section 4.07. Death Benefits.

26 

 

 

 

  ARTICLE V. SPECIAL DEFINED CONTRIBUTION CREDITS

28 

 

 Section 5.01. Distribution In Accordance With This Plan.

28 

 

 Section 5.02. Distribution of Single Sum Benefits.

28 

 

 Section 5.03. Distribution of 180 Month Period Certain Installment Benefit.

28 

 

 Section 5.04. Distribution of Annuity Benefits.

29 

 

 Section 5.05. Death Benefits.

31 

 

 

 

  ARTICLE VI. SPECIAL RULES APPLICABLE IN THE EVENT OF A CHANGE IN CONTROL OF THE COMPANY

33 

 

 Section 6.01. Definitions

33 

 

 Section 6.02. Special Provisions Following Change in Control.

36 

 

 Section 6.03. Maximum Payment Limitation.

39 

 

 Section 6.04. Resolution of Disputes.

40 

 

 

 

  ARTICLE VII. GENERAL PROVISIONS

42 

 

 Section 7.01. Administration.

42 

 

 Section 7.02. Claims Procedures.

42 

 

 

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 Section 7.03. Participant Rights Unsecured.

44 

 

 Section 7.04. Tax Withholding.

44 

 

 Section 7.05. Amendment or Termination of Plan.

45 

 

 Section 7.06. Administrative Expenses.

47 

 

 Section 7.07. Effect on Other Employee Benefit Plans.

47 

 

 Section 7.08. Successor and Assigns.

48 

 

 Section 7.09. Additional Section 409A Provisions.

48 

 

 Section 7.10. Offset.

49 

 

 

 

 

ii


 

 

INTEGRYS ENERGY GROUP, INC.

 

PENSION RESTORATION AND

 

SUPPLEMENTAL RETIREMENT PLAN

 

 

 

The Integrys Energy Group, Inc. Pension Restoration and Supplemental Retirement Plan (the “Plan”) was originally adopted effective January 1, 2001 as the WPS Resources Corporation Pension Restoration and Supplemental Retirement Plan.  The Plan name has been changed to reflect the change in the name of the plan sponsor from WPS Resources Corporation to Integrys Energy Group, Inc. (“Company”).   The Plan is intended to promote the best interests of the Company and its stockholders by attracting and retaining key management employees possessing a strong interest in the successful operation of the Company and its affiliates and by encouraging their continued loyalty, service and counsel to the Company and its affiliates.

 

The Plan is amended and restated effective January 1, 2011, as set forth herein.

 

 

 

 

 

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ARTICLE I.  DEFINITIONS AND CONSTRUCTION

 

Section 1.01.  Definitions.   The following terms have the meanings indicated below unless the context in which the term is used clearly indicates otherwise:

 

(a)   Actuarial Equivalent or Actuarially Equivalent:  A benefit of equivalent actuarial value, determined by assuming payment made or commencing on the Calculation Date and determined on the basis of the following interest and mortality assumptions:

 

(1)   Pension Restoration Benefit.

 

(A)  

For purposes of converting from a single sum payment to a single life annuity without survivor benefits (“SLA”), or from a SLA to a single sum payment, the interest rate and mortality table specified under Part A or C of the Retirement Plan (whichever is applicable to the Participant) that is determined pursuant to Code Section 417(e)(3) and that is used under the Retirement Plan for purposes of converting a SLA into a single sum benefit amount or a single sum benefit amount into a SLA (the “417(e)(3) Rates”).

 

(B)  

For purposes of converting from a SLA to a one hundred eighty (180) month period certain installment benefit, a seven percent (7%) interest rate and the 1983 Group Annuity Mortality Table (Unisex).

 

(C)  

For purposes of converting from a SLA to a joint and fifty percent (50%) surviving Spouse annuity or to any optional form of annuity distribution that is available to the Participant,  the interest, mortality

 

 

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or other factors that would be used for such purposes if the Pension Restoration Benefit were being paid under Part A or Part C of the Retirement Plan (whichever is applicable to the Participant.

 

(2)   Supplemental Retirement Benefit.

 

(A)  

For purposes of calculating the offset under Section 4.03(a)(2)(B), the 417(e)(3) Rates.

 

(B)  

For purposes of converting from the one hundred eighty (180) month period certain installment benefit to a single sum benefit, the interest rate component of the 417(e)(3) Rates, but with no mortality assumption or adjustment.

 

(C)  

For purposes of converting from the one hundred eighty (180) month period certain installment benefit to an annuity benefit, or for purposes of the early commence reduction described in Section 6.02(a)(2)(B), a seven percent (7%) interest rate and the 1983 Group Annuity Mortality Table (Unisex).

 

(3)   Defined Contribution Restoration and SERP Benefit.

 

(A)  

For purposes of converting from a single sum benefit to a SLA, the 417(e)(3) Rates.

 

(B)  

For purposes of converting from a SLA to another form of annuity payment or to a one hundred eighty (180) month period certain installment benefit, a seven percent (7%) interest rate and the 1983 Group Annuity Mortality Table (Unisex).

 

 

3


 

 

(b)   Affiliate:  For all purposes of the Plan other than Article VI, a corporation, trade or business that, with the Company, constitutes a controlled group of corporations or a group of trades or businesses under common control within the meaning of Code Section 414(b) and (c); provided that Code Section 414(b) and (c) shall be applied by substituting “at least fifty percent (50%)” for “at least eighty percent (80%)” each place it appears therein.

 

(c)   Applicable Account Balance:  The Participant’s qualified and non-qualified plan balances, as of the Calculation Date applicable to the Participant, that are attributable to Employer Retirement Contributions and Special Defined Contribution Credits allocated to the Participant with respect to the 2013 – 2017 plan years, in all cases including any actual or deemed investment gains or losses on such contributions or credits.

 

(d)   Beneficiary:  The person or entity designated by a Participant to be his or her beneficiary for purposes any death benefit that may become payable under Sections 3.06 or 4.07.  If a Participant designates his or her Spouse as a beneficiary, such beneficiary designation (to the extent it relates to the Spouse) shall become null and void on the date the Human Resources Department of the Company obtains actual written notice of the Participant’s divorce or legal separation from such Spouse; provided that neither the Plan nor Committee shall be liable to any Beneficiary for the payments that have been made to such spouse prior to the date the Committee is notified in writing of such divorce or legal separation from such spouse.  If a valid designation of beneficiary is not in effect at the time of the Participant’s death, the estate of the Participant is deemed to be the sole beneficiary.  If a beneficiary dies while entitled to receive distributions, any remaining payments shall be paid to the contingent beneficiary designated by the Participant.  If payments have been made to a beneficiary or beneficiaries following the Participant’s death and all beneficiaries and contingent beneficiaries designated by the Participant die prior to receiving all of the benefits payable on behalf of the Participant, any remaining payments due in accordance with the terms of the Plan shall be paid to the estate of the beneficiary or contingent beneficiary who last received payments under the Plan.  If all beneficiaries and contingent beneficiaries designated by the Participant die prior to receiving any payments from the Plan, any benefits payable on behalf of the Participant shall be paid to the estate of the Participant.  Beneficiary designations shall be in writing, filed with the Committee, and in such form as the Committee may prescribe for this purpose.

 

 

4


 

 

(e)   Board:  The Board of Directors of the Company.

 

(f)   Calculation Date:  The first day of the month following the month in which occurs the Participant’s Separation from Service.

 

(g)   Cause:  Termination by the Company or an Affiliate of a Participant’s employment in connection with or following a Change in Control of the Company shall be limited to the following:

 

(i)  

the engaging by the Participant in intentional conduct not taken in good faith which has caused demonstrable and serious financial injury to the Company and/or an Affiliate, as evidenced by a determination in a binding and final judgment, order or decree of a court or administrative agency of competent jurisdiction, in effect after exhaustion or lapse of all rights of appeal, in an action, suit or proceeding, whether civil, criminal, administrative or investigative;

 

(ii)  

conviction of a felony (as evidenced by binding and final judgment, order or decree of a court of competent jurisdiction, in effect after exhaustion of all rights of appeal) which substantially impairs the Participant’s ability to perform his or her duties or responsibilities;

 

(iii)  

continuing willful and unreasonable refusal by the Participant to perform the Participant’s duties or responsibilities (unless significantly changed without the Participant’s consent); or

 

(iv)  

material violation of the Company’s Code of Conduct.

 

(h)   Code:  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.  Any reference to a specific provision of the Code shall be deemed to include a reference to any successor provision thereto.

 

(i)   Committee:  The Compensation Committee of the Board.

 

 

5


 

 

(j)   Company:  Integrys Energy Group, Inc., or any successor corporation.

 

(k)   Credited Service:  A Participant’s credited service for benefit accrual purposes that (1) with respect to periods prior to January 1, 2013, is recognized under the Retirement Plan for purposes of calculating the amount of the Participant’s benefit under that plan, and (2) with respect to periods after December 31, 2012 and before January 1, 2018, would have been recognized under the Retirement Plan if the Retirement Plan had continued to recognize benefit accrual service.  Employment after December 31, 2017 will not be recognized as Credited Service for purposes of this Plan.

 

(l)   Employee:  A common law employee of the Company or an Affiliate who is a management or highly compensated employee, as those terms are defined for purposes of the “top-hat” rules of ERISA.

 

(m)   Employer Retirement Contributions:  The non-elective contributions that are made by the Company or an Affiliate to a qualified defined contribution plan and that are not contingent upon the Participant having made contributions to such plan.

 

(n)   ERISA:  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.  Any reference to a specific provision of ERISA shall be deemed to include a reference to any successor provision thereto.

 

(o)   Participant:  An Employee who has been designated by the Committee as being eligible to participate in the Integrys Energy Group, Inc. Nonqualified Deferred Compensation Plan (or any successor plan thereto); provided (i) that the Pension Restoration Benefit Component of the Plan is limited to those Participants who are covered under the Retirement Plan, (ii) except as otherwise provided by the Committee, an Employee of Integrys Energy Services, Inc. (or a subsidiary thereof) who is employed in a non-officer position, even though designated for participation in the Integrys Energy Group, Inc. Deferred Compensation Plan, shall not be eligible for the Pension Restoration Benefit Component of the Plan if the Employee is covered under an employment contract or agreement that excludes the Employee from receiving pension restoration, supplemental retirement or similar restoration benefits or credits,

 

 

6


 

 

or the Employee is covered under an employment contract or agreement that references the Employee’s eligibility for deferred compensation generally but that does not specifically provide for the Participant as being eligible for pension restoration, supplemental retirement or similar restoration benefits or credits, and (iii) the Supplemental Retirement Benefit component of the Plan is limited to those Employees who were designated for participation for that component prior to April 1, 2008.  Effective April 1, 2008, no additional Employees will become Participants in the Supplemental Retirement Benefit component of the Plan.

 

(p)   Payment Date:  The last business day of the seventh month following the month in which the Participant’s Separation from Service occurs.  This is the date on which payment of a Participant’s vested benefit is made (if paid as a single sum) or commences (if paid in installments or as a monthly annuity).  All benefits are paid on the last business day of the month.

 

(q)   Pension Restoration Benefit:  The benefit described in Article III.

 

(r)   Plan:  The Integrys Energy Group, Inc. Pension Restoration and Supplemental Retirement Plan, as from time to time amended and in effect.

 

(s)   Regular Monthly Payment:  A Participant’s normal monthly installment or annuity payment amount determined as of the Calculation Date in accordance with the terms of the Plan, without regard to the Retroactive Benefit Payment or interest on the Retroactive Benefit Payment.

 

(t)   Retirement Plan:  Part A or C (whichever is applicable to the Participant) of the Integrys Energy Group Retirement Plan, or any successor thereto.

 

(u)   Retroactive Benefit Payment: The sum of the Regular Monthly Payments that would have been made, if monthly benefit payments had commenced with a payment on the last day of the month in which occurs the Calculation Date, during the period beginning with the month in which occurs the Calculation Date and ending with the month preceding the month in which occurs the Payment Date.

 

 

7


 

 

(v)   Separation from Service:  A Participant’s Separation from Service occurs when the Company (and its Affiliates) and the Participant reasonably anticipate that no further services (either as an employee or as an independent contractor) will be performed by the Participant for the Company (or an Affiliate) after a certain date, or that the level of bona fide services the Participant will perform for the Company (or the Affiliate) after such date (either as an employee or as an independent contractor) will permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed by the Participant (whether as an employee or independent contractor) for the Company or an Affiliate over the immediately preceding thirty-six (36) month period (or such lesser period of actual services).  A Participant is not considered to have incurred a Separation from Service if the Participant is absent from active employment due to military leave, sick leave or other bona fide leave of absence and if the period of such leave does not exceed the greater of (i) six (6) months, or (ii) the period during which the Participant’s right to reemployment by the Company or an Affiliate is provided either by statute or by contract; provided that if the leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than six (6) months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, the leave may be extended for up to twenty-nine (29) months without causing a Separation from Service.

 

(w)   Special Defined Contribution Credits:  The defined contribution restoration and/or supplemental retirement credits made to a Participant’s account under a non-qualified deferred compensation plan with respect to the 2013-2017 plan years, that represent (1) amounts that would have been contributed as Employer Retirement Contributions on the Participant’s behalf to a qualified defined contribution plan were it not for the limitations of Code Section 401(a)(17) and 415, or (2) other supplemental retirement credits that are not contingent upon the Participant having deferred compensation under such plan.

 

(x)   Spouse:  A person of the opposite sex to whom the Participant is legally married.

 

(y)   Supplemental Retirement Benefit:  The benefit described in Article IV.

 

 

8


 

 

(z)   Trust:  The Integrys Energy Group, Inc. Deferred Compensation Trust, which was formerly known as the WPS Resources Corporation Deferred Compensation Trust,  or other funding vehicle which may from time to time be established, as amended and in effect from time to time.

 

Section 1.02.   Construction and Applicable Law.

 

(a)   Wherever 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 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 Illinois, without regard to the principle of conflict of laws, to the extent such laws are not preempted by federal law.  Any action for benefits under the Plan or to enforce the terms of the Plan shall be heard in the State of Illinois by the court with jurisdiction over the claim.  In case any provision of the Plan is held illegal or 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.

 

 

 

9


 

 

ARTICLE II.   PAYMENT ELECTIONS

 

Section 2.01.   General Rules.

 

(a)   Participant Payment Elections .  A Participant’s vested benefits are distributed based upon the Participant’s payment election (or deemed payment election).

 

(b)   Coordinated Distribution of Pension Restoration Benefit, Supplemental Retirement Benefit and Certain Deferred Compensation Benefits .  With respect to any Participant who has been designated for participation in both the Pension Restoration Benefit and the Supplemental Retirement Benefit components of the Plan, the Participant makes a single benefit payment election (or deemed election) that governs the form and time of distribution of (1) the Pension Restoration Benefit, (2) the Supplemental Retirement Benefit, and (3) the portion of the Participant’s Applicable Account Balance that is attributable to Special Defined Contribution Credits.  The Participant is not able to make separate elections with respect to each of these benefits.

 

Section 2.02.   Participant Payment Election.

 

(a)   Payment Election as to Form of Payment .  Each Participant who became a Participant prior to January 1, 2009 and whose participation is limited to the Pension Restoration Benefit Component of the Plan shall make a payment election whether to receive his or her vested Pension Restoration Benefit either as (i) a single sum cash payment, or (ii) an annuity distribution.  Each Participant who became a Participant prior to January 1, 2009 and who participates in both the Pension Restoration Benefit and the Supplemental Retirement Benefit components of the Plan shall make a single payment election whether to receive his or her vested benefits either as (i) a single sum cash payment, (ii) a one hundred eighty (180) month period certain installment payment, or (ii) an annuity distribution.  The Participant’s single payment election will govern the distribution of the Participant’s vested Pension Restoration Benefit, the Participant’s vested Supplemental Retirement Benefit, and if the Participant has received Special Defined Contribution Credits, the portion of the Participant’s vested Applicable Account Balance that is attributable to Special Defined Contribution Credits.  A Participant who becomes a

 

 

10


 

 

Participant after December 31, 2008 shall be deemed to have elected a single sum distribution, and such a Participant may not otherwise make a payment election.

 

(b)   Annuity Distribution .  A Participant who has elected (or is deemed to have elected) the annuity payment option is not required to elect the specific form of annuity at the time of making the payment election, so long as the available forms of annuity distribution are actuarially equivalent for purposes of Code Section 409A.  If the available forms of annuity distribution are actuarially equivalent for purposes of Code Section 409A, the Participant may choose the specific form of monthly annuity at any time prior to the Calculation Date, in accordance with rules prescribed by the Committee.  Additional rules regarding annuity benefit distribution are set forth in Sections 3.05 and 4.06.

 

(c)   Date of Payment Election .  In the case of an Employee who becomes a Participant prior to January 1, 2009, the payment election must be made on or before December 31, 2008.  The election on file (or deemed to be on file) for such Participant at December 31, 2008 will be the Participant’s payment election.  All payment elections must be made in such form and in accordance with such rules prescribed by the Committee or its delegate.

 

(d)   Default Payment Election .  If a Participant fails to make such a payment election within the prescribed period, the Participant will be deemed to have elected to receive a single sum  distribution; provided that in the case of a Participant who participates in both the Pension Restoration Benefit and the Supplemental Retirement Benefit components of the Plan, the Participant’s benefit election on file at December 31, 2008, even if originally made only with respect to the Pension Restoration Benefit, shall be deemed to be the Participant’s payment election both with respect to the Pension Restoration Benefit and the Supplemental Retirement Benefit (and if the Participant has received Special Defined Contribution Credits, the portion of the Participant’s vested Applicable Account Balance that is attributable to Special Defined Contribution Credits).

 

(e)   Irrevocability of Payment Election .  A Participant’s payment election (or deemed payment election) is irrevocable.

 

 

 

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ARTICLE III.   PENSION RESTORATION BENEFIT

 

Section 3.01.   Eligibility.

 

An Employee is eligible for the Pension Restoration Benefit if:

 

(a)   The Committee has designated the Employee for participation in the Pension Restoration Benefit component of the Plan and the Employee, in accordance with Section 1.01(o), has become a Participant in the Pension Restoration Benefit component of the Plan; and

 

(b)   The Participant is covered under and has a vested entitlement to a retirement benefit from the Retirement Plan.

 

Section 3.02.   Pension Restoration Benefit Formula.

 

The Pension Restoration Benefit accrued by an eligible Participant is determined as of the Calculation Date and, when expressed in the form of a life annuity without survivor benefits commencing with a payment for the month in which occurs the Calculation Date, is equal to the difference between (a) and (b) below:

 

(a)   The monthly retirement benefit that would be payable to the Participant under the Retirement Plan if the benefit were determined by applying all of the terms and conditions of the Retirement Plan, except for the following modifications or assumptions:

 

(1)   The benefit is paid in the form of a life annuity without survivor benefits, regardless of the form of benefit actually elected by the Participant under the Retirement Plan;

 

(2)   The benefit is paid commencing with a payment for the month in which occurs the Calculation Date, regardless of the Participant’s actual date of benefit commencement under the Retirement Plan and regardless of the Payment Date applicable to the Participant under this Plan;

 

 

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(3)   The benefit is calculated as if base salary and annual bonus (but not long-term bonus) amounts deferred by the Participant under the Integrys Energy Group, Inc. Deferred Compensation Plan had been paid to the Participant as current compensation in the year of the deferral;

 

(4)   The benefit is calculated as if the compensation limitation of Section 401(a)(17) of the Code and the maximum benefit limitation of Section 415 of the Code did not apply.

 

(b)   The monthly retirement benefit that would be payable to the Participant under the Retirement Plan if the benefit were determined in accordance with the modifications or assumptions described in Section 3.02(a)(1) and (2) above, but otherwise applying all of the terms and conditions of the Retirement Plan.  For this purpose, the Participant’s benefit under the Retirement Plan shall be determined by attributing to the Participant any portion of the Retirement Plan benefit that is assigned to an alternate payee pursuant to a domestic relations order.

 

Section 3.03.   Distribution of Single Sum Benefits.

 

If the Participant’s Pension Restoration Benefit is payable in a single sum, distribution will be made in accordance with the following rules:

 

(a)   Time of Payment .  The single sum payment will be calculated as of the Calculation Date but paid on the Payment Date.

 

(b)   Amount of Single Sum Benefit .  The single sum cash payment shall be equal to the sum of (1) an amount that, as of the Calculation Date, is Actuarially Equivalent to the Participant’s Pension Restoration Benefit as calculated under Section 3.02 above.  For a married Participant, the single sum benefit does not include the value of any surviving Spouse benefit that would be paid if the Participant had instead elected an annuity benefit, i.e., the single sum benefit is Actuarially Equivalent to the single life annuity with no survivor benefits.  The payment to be made on the Payment Date will equal the sum of (1) the single sum amount determined, as of the Calculation Date, in accordance with the preceding sentence, and (2)

 

 

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interest on the single sum amount from the last day of the month in which occurs the Calculation Date through the Payment Date.   Interest under clause (2) above, for the period through the last day of the month in which occurs the six (6) month anniversary of the Participant’s Separation from Service, shall be determined at the 417(e)(3) Rate (first segment rate) in effect under the Retirement Plan for the calendar year in which occurs the Calculation Date.

 

(c)   Death Prior to Payment Date .  This Section 3.03 applies only if the Participant is alive on the Payment Date.  If the Participant dies prior to the Payment Date, the benefits (if any) payable following the Participant’s death shall be determined in accordance with Section 3.06.

 

Section 3.04.   Distribution of 180 Month Period Certain Installment Benefit.

 

If the Participant’s Pension Restoration Benefit is payable as a one hundred eighty (180) month period certain installment benefit (in accordance with Section 2.02, only certain Participants are eligible for this form of payment), distribution will be made in accordance with the following rules:

 

(a)   Time of Payment .  The one hundred eighty (180) month period certain installment benefit will be calculated as of the Calculation Date but paid beginning on the Payment Date.

 

(b)   Amount of Each Installment .  The amount of each monthly installment shall be determined by converting the Participant’s Pension Restoration Benefit as calculated under Section 3.02 above into an Actuarially Equivalent one hundred eighty (180) month period certain installment benefit.  For a married Participant, the one hundred eighty (180) month period certain installment benefit does not include the value of any surviving Spouse benefit that would be paid if the Participant had instead elected an annuity benefit, i.e., the one hundred eighty (180) month period certain installment benefit is Actuarially Equivalent to the single life annuity with no survivor benefits.  The payment made on the Payment Date will include (1) the Regular Monthly Payment for the month in which occurs the Payment Date, (2) the Retroactive Benefit Payment, and (3) interest on each monthly installment that constitutes part of the Retroactive Benefit Payment for the period from the date on which such installment would have been paid had monthly payments commenced with a payment on the last day of the month that includes the Calculation Date through the Payment Date.  Following the payment on the Payment Date,

 

 

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payments to the eligible Participant in an amount equal to the Regular Monthly Payment shall continue until a total of one hundred eighty (180) monthly payments have been made; provided that for purposes of determining whether a total of one hundred eighty (180) monthly payments have been made, the payment made on the Payment Date will be treated as consisting of seven (7) payments.  Interest under clause (3) above, for the period through the last day of the month in which occurs the six (6) month anniversary of the Participant’s Separation from Service, shall be determined at the 417(e)(3) Rate  (first segment rate) in effect under  the Retirement Plan for the calendar year in which occurs the Calculation Date.  For example, if the Participant incurs a Separation from Service on December 31, 2009, the Calculation Date is January 1, 2010, the first payment would have been made on January 31, 2010 if payment had commenced with a payment for the month that includes the Calculation Date, and the Payment Date will be July 31, 2010.  Interest on each monthly installment that constitutes part of the Retroactive Benefit Payment for the period from the date on which the monthly installment otherwise would have been paid through the Payment Date will be credited at the 2010 417(e)(3) Rate (first segment rate) in effect under the Retirement Plan.

 

(c)   Death Prior to Payment Date .  This Section 3.04 applies only if the Participant is alive on the Payment Date.  If the Participant dies prior to the Payment Date, the benefits (if any) payable following the Participant’s death shall be determined in accordance with Section 3.06.

 

Section 3.05.   Distribution of Annuity Benefits.

 

If the Participant’s Pension Restoration Benefit is payable as an annuity, distribution will be made in accordance with the following rules:

 

(a)   Normal Form of Distribution .  If the Participant has elected (or is deemed to have elected) an annuity form of distribution, then payment for an unmarried Participant will be made in accordance with subsection (a)(1) below, and payment for a married Participant, unless the Participant has validly elected payment in an alternate form of annuity payment in accordance with subsection (b) below, will be made in accordance with subsection (a)(2) below:

 

(1)   Unmarried Participant .  If the Participant is not married on the Calculation Date, distribution will be in the form of

 

 

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a monthly single life annuity in the amount determined under Section 3.02.  Monthly payments will commence on the Payment Date applicable to the Participant and will continue until and including a payment for the month in which occurs the Participant’s death.

 

(2)   Married Participant .  If the Participant is married on the Calculation Date, distribution will be in the form of a joint and fifty percent (50%) survivor annuity with the Participant’s Spouse as of the Calculation Date as the sole contingent annuitant.  Monthly payments under the joint and fifty percent (50%) survivor annuity will commence on the Payment Date applicable to the Participant and will continue until and including a payment for the month in which occurs the Participant’s death.  If the Participant predeceases the Spouse to whom he or she was married on the Calculation Date, fifty percent (50%) of the Regular Monthly Payment Amount applicable to the Participant during his or her lifetime shall continue during the remaining lifetime of such Spouse.  The Regular Monthly Payment Amount payable to the Participant during his or her lifetime will be the amount determined under Section 3.02 reduced, in order to reflect the cost of the survivor benefit, in the same manner as the benefit would be reduced under Part A or Part C of the Retirement Plan (whichever is applicable to the Participant) if the benefit were being paid under the Retirement Plan.

 

(b)   Alternate Forms of Annuity Distribution .  In lieu of the normal form of payment applicable under subsection (a) above, a Participant who participates in Part A of the Retirement Plan, who is married on the Calculation Date, and who has in effect an election of the annuity payment method, may elect, in accordance with such conditions as may be established by the Committee, to receive payment in an alternate form of annuity that would be available to the Participant under Part A of the Retirement Plan if the Pension Restoration Benefit were being

 

 

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paid under Part A of the Retirement Plan rather than under this Plan.  In lieu of the normal form of payment applicable under subsection (a) above, a Participant who participates in Part C of the Retirement Plan and who has in effect an election of the annuity payment method, may elect, in accordance with such conditions as may be established by the Committee, to receive payment in an alternate form of annuity that would be available to the Participant under Part C of the Retirement Plan if the Pension Restoration Benefit were being paid under Part C of the Retirement Plan rather than under this Plan. The alternate form of annuity distribution shall be calculated by converting the monthly benefit amount determined under Section 3.02 into a payment in such alternate annuity form, with the conversion accomplished by using the adjustment factors that would be used under the Retirement Plan for purposes of converting from the normal form of benefit to an alternate form of annuity if the Pension Restoration Benefit were being paid under Part A of Part C of the Retirement Plan, whichever is applicable to the Participant.  If the Participant elects payment in an alternate form of annuity that provides surviving Spouse benefits following the Participant’s death, the surviving Spouse benefits will be paid to the Spouse to whom the Participant is married on the Calculation Date.  The Participant’s election of an alternate form of annuity must be made prior to the Calculation Date, and becomes irrevocable on the Calculation Date; provided that if the Participant is covered under Part A of the Retirement Plan and is not married on the Calculation Date, any prior election of payment in an alternate form of annuity shall be null and void.

 

(c)   Regular Monthly Payments and the Retroactive Benefit Payment . The payment made on the Payment Date will include (1) the Regular Monthly Payment for the month in which occurs the Payment Date, (2) the Retroactive Benefit Payment, and (3) interest on each monthly installment that constitutes part of the Retroactive Benefit Payment for the period from the date on which such installment would have been paid had monthly payments commenced with a payment on the last day of the month that includes the Calculation Date through the Payment Date.  Each subsequent monthly payment to the Participant will be an amount equal to the Regular Monthly Payment.  Interest under clause (3) above, for the period through the last day of the month in which occurs the six (6) month anniversary of the Participant’s Separation from Service, shall be determined at the 417(e)(3) Rate (first segment rate) in effect under the Retirement Plan for the calendar year in which occurs the Calculation Date.

 

 

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(d)   Death Prior to Payment Date .  This Section 3.05 applies only if the Participant is alive on the Payment Date.  If the Participant dies prior to the Payment Date, the benefits (if any) payable following the Participant’s death shall be determined in accordance with Section 3.06.

 

Section 3.06.   Death Benefits.

 

The form and time of benefit distribution is irrevocably established at the earlier to occur of (1) the Payment Date (which, in accordance with Section 1.409A-3(b) of the Income Tax Regulations, is an objectively determinable and nondiscretionary date that is based upon the Participant’s Separation from Service and that is fixed at the time of the Participant’s Separation from Service), and (2) the date of the Participant’s death.

 

(a)   Death Prior to Payment Date .  If a Participant who is eligible for a Pension Restoration Benefit dies prior to the Payment Date (including a Participant who is eligible for a Pension Restoration Benefit who dies during employment), the Participant’s Beneficiary will receive a single sum payment equal to the single sum payment to which the Participant would have been entitled to as of the Calculation Date if the Participant had in effect a single sum payment election under Article II (regardless of the election actually made by the Participant), together with interest, at the 417(e)(3) Rate (first segment rate) from the last day of the month in which occurs the Calculation Date through the last day of the month preceding the month in which payment to the Beneficiary is made.

 

(b)   Death on or After the Payment Date .

 

(1)   Death After Commencement of Installment Payments .  If the Participant’s benefit is being distributed as a one hundred eighty (180) month period certain installment benefit and the Participant dies on or after the Payment Date, i.e., on or after the date on which installment distributions to the Participant have begun, but prior to the date on which one hundred eighty (180) payments have been made, monthly installment distributions to the Beneficiary (at the same time as payments to the Participant would have been made) shall continue until the total number of monthly

 

 

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installments paid to the Beneficiary, when aggregated with the number of monthly installments paid to the Participant prior to his or her death, equals one hundred eighty (180).

 

(2)   Death After Commencement of Annuity Payments .  If the Participant’s benefit is being distributed as an annuity and the Participant dies on or after the Payment Date, i.e., on or after the date on which payment of Plan benefits has actually begun, the only benefits payable following the Participant’s death shall be those (if any) payable under the form of annuity distribution in which the Participant’s benefit was being paid.  Thus, for example, if the Participant was receiving payments in the form of a single life annuity, no further benefits are payable following the Participant’s death.  Similarly, if the Participant was receiving benefits in the form of a joint and fifty percent (50%) s


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