Exhibit 10.28
PENSION
EQUALIZATION PLAN
OF NEW
JERSEY RESOURCES CORPORATION
Originally Effective as of February 27, 1991
Amended
and Restated as of January 1, 2005
PENSION EQUALIZATION
PLAN
OF NEW JERSEY RESOURCES
CORPORATION
The Pension Equalization Plan of New
Jersey Resources Corporation (the "Plan") was originally authorized
and adopted by the Board of Directors of New Jersey Resources (the
"Corporation") effective as of February 27, 1991and is now amended
and restated effective January 1, 2005. The purpose of the Plan is
to provide certain supplemental benefits to certain select
management or highly compensated employees who are participants in
the Plan for Retirement Allowances for Non-Represented Employees of
New Jersey Natural Gas Company (the "Qualified Plan").
All benefits payable under the Plan,
which is intended to constitute both an unfunded excess benefit
plan under Section 3(36) of Title I of the Employee Retirement
Income Security Act of 1974, as amended, (“ERISA”), and
a nonqualified, unfunded deferred compensation plan for a select
group of management or highly compensated employees under ERISA,
shall be paid out of the general assets of the Corporation. The
Corporation may establish and fund a trust in order to aid it in
providing benefits due under the Plan.
Benefits payable to any participant
of the Plan who terminated employment before January 1, 2005 shall
be governed by the provisions of the Plan as in effect at the time
of termination, except as otherwise specifically stated elsewhere
herein. Benefits accruing and /or vesting under the Plan after
December 31, 2004 are subject to the provisions of Code Section
409A. Benefits that accrued and became vested under the Plan prior
to January 1, 2005 are not subject to Code Section 409A unless the
provisions of the Plan relating to such benefits are materially
modified after October 3, 2004. On and before December 31, 2008, to
the extent applicable, the Plan administrator has administered the
Plan in accordance with the provisions of Section 409A of the
Code as enacted by the American Jobs Creation Act of 2004 and
regulations and other applicable guidance issued thereunder,
including but not limited to the applicable transition rules
(collectively “Code Section 409A”).
TABLE OF CONTENTS
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1
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ARTICLE II
PARTICIPATION ; AMOUNT
AND PAYMENT OF BENEFITS
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2
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2
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2
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3
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3
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4
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2.06 Timing
of Payment for a “Specified Employee”
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6
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2.07 Disability
Retirement
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6
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7
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2.09 Reemployment
of Former Participant or Retired Participant
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8
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8
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2.11 Qualified
Domestic Relations Orders
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8
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ARTICLE
III PLAN
ADMINISTRATION
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3.01 Administration
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9
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3.02 Claims
Procedure
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9
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3.03 Expenses
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10
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ARTICLE
IV GENERAL
PROVISIONS
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10
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10
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4.02 Duration
of Benefits
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11
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4.03 Discontinuance
and Amendment
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11
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4.05 Plan
Not a Contract of Employment
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12
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12
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12
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4.08 Nonalienation
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12
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4.09 Construction
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12
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APPENDIX A
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APPENDIX B
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APPENDIX C
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APPENDIX A
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ARTICLE I
DEFINITIONS
The following terms when capitalized
herein shall have the meanings assigned below.
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Accrued Basic Retirement
Allowance shall mean a
Participant’s “Accrued Retirement Allowance” (as
such term is defined in the Qualified Plan) under the Qualified
Plan attributable to the Participant’s “Basic
Allowance” (as such term is defined in the Qualified Plan)
under the Qualified Plan determined, for purposes of calculating
the amount of benefits under Section 2.02, 2.08, and Appendices A,
B, C, D and E prior to the application of any offset required
pursuant to Section 4.9 (Non-duplication of benefits) of the
Qualified Plan.
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Actuarial Equivalent
shall mean a benefit of equivalent
value to another benefit determined using the factors specified in
the Qualified Plan for a similar determination, unless otherwise
provided in the Plan. With regard to the
Non-Grandfathered Benefit, Actuarial Equivalent will not violate
Code Section 409A.
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Affiliate shall mean any division, subsidiary or
affiliated company of the Corporation not participating in the
Plan, which is an “Affiliate” as defined in the
Qualified Plan but only to the extent such “Affiliate”
is required to be treated as the Corporation for purposes of the
applicable provision of Code Section 409A.
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Beneficiary
shall mean the person designated to
receive benefits after a Participant's death; provided, however,
that if a Participant elects Option C under Section 2.04(c), he or
she may elect a primary Beneficiary and a secondary
Beneficiary. A Participant may, from time to time,
revoke or change his or her Beneficiary designation without the
consent of any prior Beneficiary by filing a new designation with
the Committee. The last such designation received by the
Committee shall be controlling, provided however, that no
designation or change or revocation thereof, shall be effective
unless received by the Committee prior to the Participant’s
death or the Participant’s Benefit Commencement Date, if
earlier, and in no event shall it be effective as of a date prior
to such receipt.
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Benefit Commencement
Date shall mean, unless
the Plan expressly provides otherwise, the first day of the first
period following the Participant’s Separation from Service
for which an amount is due as an annuity or any other
form. The Benefit Commencement Date under the Plan is
determined without regard to any delay in payment pursuant to
Section 2.06 or Section 2.10.
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Code shall mean the Internal Revenue Code of
1986, as amended from time to time.
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Committee shall mean the Benefit Administration Committee
of the Corporation or any successor thereto.
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Corporation
shall mean New Jersey Resources
Corporation, or any successor by merger, purchase or
otherwise.
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Disabled shall mean totally disabled and permanently in
accordance with a determination by the Social Security
Administration. Sufficient proof of such determination
shall be provided to the Administrator in order for a Participant
to be determined Disabled under the Plan.
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Effective Date
shall mean February 27,
1991.
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Spouse shall mean a person of the opposite sex of the
Participant who is the Participant’s husband or wife as
provided in the Defense of Marriage Act of 1996.
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Surviving Spouse
shall mean the Spouse of the
Participant to whom the Participant has been married throughout the
one-year period ending on the date of the Participant’s
death.
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Unreduced Benefit Commencement
Date shall mean the
earliest date as of which a Participant could commence receiving
his or her Accrued Basic Retirement Allowance under the Qualified
Plan without reduction for early commencement, regardless of
whether or not the Participant actually commences payment of his or
her Accrued Basic Retirement Allowance under the Qualified Plan as
of such date.
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ARTICLE II
PARTICIPATION; AMOUNT AND PAYMENT
OF BENEFITS
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Eligible Employees participating in
the Plan on December 31, 2006 shall continue to be a Participant in
the Plan thereafter in accordance with the terms of the
Plan.
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Effective on and after January 1,
2007, except as otherwise provided in an Appendix, an Eligible
Employee shall become a Participant of the Plan on the first day of
calendar year next following the date he or she is approved for
participation in the Plan by the Committee.
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A Participant's participation in the
Plan shall terminate upon the Participant's death or other
Separation from Service, unless a benefit is payable under the Plan
with respect to the Participant or his or her Beneficiary under the
provisions of this Article II.
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Amount of Benefits
Except asotherwise provided in an Appendix and
prior to adjustment in accordance with Section 2.04, as of each
Participant’s Benefit Commencement Date, the
Participant’s benefit under this Article II shall be a
monthly payment for the life of the Participant and shall equal the
excess, if any, of (a) over (b) as calculated as of Separation from
Service (except as provided in Section 2.07(c)) and determined as
follows:
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the monthly Accrued Basic Retirement
Allowance that would have been payable beginning on the
Participant’s Benefit Commencement Date in the form of a life
annuity under the terms of the Qualified Plan, determined without
regard to the limitations imposed by Section 401(a)(4) of the Code,
the limitation on compensation imposed by Section 401(a)(17) of the
Code, or the maximum limitation on benefits imposed by Section 415
of the Code without regard to any election to defer compensation
under the New Jersey Resources Corporation Officer’s Deferred
Compensation Plan (or a successor plan) and without regard to any
accruals under the Qualified Plan because of a disability if such
accruals relate to any period after which a Participant has
commenced his benefit under this Plan;
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the monthly Accrued Basic Retirement
Allowance that would have been payable beginning on the
Participant’s Benefit Commencement Date in the form of a life
annuity under the terms of the Qualified Plan without regard to any
accruals under the Qualified Plan because of a disability if such
accruals relate to any period after which a Participant has
commenced his benefit under this Plan;
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The foregoing determination shall be
made as of the Participant’s Benefit Commencement Date, with
any adjustment for commencement before or after the Participant's
Normal Retirement Date made using the applicable adjustment factors
under the Qualified Plan.
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Vesting
Except as otherwise provided in
Section 4.04 or an Appendix, a Participant shall be vested in, and
have a nonforfeitable right to, the benefits payable under this
Article II upon the later of the date he or she becomes a
Participant in the Plan and the date he or she has a vested and
nonforfeitable right to an Accrued Basic Retirement Allowance under
the Qualified Plan.
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Form of Payment
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Except as otherwise provided in
Appendix A, the benefit under Section 2.02 of a Participant whose
Benefit Commencement Date is prior to January 1, 2007 shall be paid
in the same form of payment in which the Participant receives his
or her Accrued Basic Retirement Allowance under the Qualified
Plan.
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Except as otherwise provided in
Appendix A, unless a Participant has made a valid election under
paragraph (c) below of an optional form of payment, the benefit
under Section 2.02 of a Participant whose Benefit Commencement Date
is on or after January 1, 2007 shall be paid in accordance with (i)
and (ii) below:
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The Grandfathered Benefit shall be
paid in the same form of payment in which the Participant receives
his or her Accrued Basic Retirement Allowance under the Qualified
Plan.
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The Non-Grandfathered Benefit shall
be paid as follows:
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If the Participant does not have a
Spouse on his or her Benefit Commencement Date, a single life
annuity for the life of the Participant, with no payments after his
or her death.
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If the Participant does have a
Spouse on his or her Benefit Commencement Date, a reduced benefit
of Actuarial Equivalent value to the Non-Grandfathered Benefit,
which shall be payable for the Participant’s life and after
his or her death 50% of such reduced amount shall be payable during
the life of, and to the Spouse whom the Participant was married on
his or her Benefit Commencement Date.
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Subject to paragraph (d) below,
except as otherwise provided in Appendix A, a Participant whose
Benefit Commencement Date is on or after January 1, 2007 may elect
to convert the Non-Grandfathered Benefit otherwise payable to him
or her into an optional benefit of Actuarial Equivalent value as
provided in one of the options set forth below:
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Option A: A reduced benefit payable during the
Participant’s life and after his or her death payable during
the life of, and to the Participant’s Beneficiary.
Option B: A reduced benefit payable during the
Participant’s life and after his or her death 50% of such
reduced amount payable during the life of, and to the
Participant’s Beneficiary.
Option C: Effective January 1, 2008, a reduced
benefit payable during the Participant’s life and after his
or her death 75% of such reduced amount payable during the life of,
and to the Participant’s Beneficiary.
Option D: A reduced benefit payable during the
Participant’s life, and if the Participant dies within 120
months of his or her Benefit Commencement Date, the remaining
balance of such 120 monthly payments shall be paid to the
Participant’s primary Beneficiary (or the Participant’s
secondary Beneficiary, if one has been designated and if the
primary Beneficiary is not then alive); provided, however, that if
the primary Beneficiary (or the secondary Beneficiary, if one has
been designated, if the primary Beneficiary is not alive on the
Participant’s date of death) does not survive the 120-month
period, a lump sum payment of Actuarial Equivalent value to the
remaining payments shall be paid to the estate of the last to
survive of the Participant, the primary Beneficiary, and the
secondary Beneficiary.
Option E: A benefit payable for the
Participant’s life with no payments after his or her
death.
Except as otherwise provided in an
Appendix, Actuarial Equivalent value shall be determined as of the
Participant’s Benefit Commencement Date for purposes of
adjusting the benefit determined under Section 2.02.
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Notwithstanding the foregoing,
subject to the provisions of Code Section 409A and except as
otherwise provided in Appendix A, a Participant’s election to
receive his or her Non-Grandfathered Benefit in an optional form of
payment as described in paragraph (c) above shall be effective as
of the Participant’s Benefit Commencement Date, provided that
the Participant makes and submits to the Committee his or her
election of an optional form of payment prior to his or her Benefit
Commencement Date. Any election hereunder as to an optional form of
payment may be revoked prior to the Participant’s Benefit
Commencement Date. A Participant whose Benefit
Commencement Date is on or after January 1, 2007 and who does not
have a valid form of payment election on file with the Committee on
his or her Benefit Commencement Date, shall receive his or her
Non-Grandfathered Benefit in accordance with paragraph (b) of this
Section 2.04.
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If the Actuarial Equivalent value of
the benefits to be paid under the Plan and all plans that are
required to be aggregated with the Plan under Code Section 409A is
less than or equal to the applicable dollar amount under Section
402(g)(1)(B) of the Code, such benefit shall be paid in one lump
sum.
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Except as otherwise provided in
Appendix A and subject to Section 2.06, the Benefit Commencement
Date of a Participant whose Qualified Plan Annuity Starting Date is
prior to January 1, 2007 shall be such Qualified Plan Annuity
Starting Date.
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Except as otherwise provided in
Section 2.07(b) or an Appendix and subject to Section 2.06, unless
a Participant has made a valid election under paragraph (c) below
of an optional Benefit Commencement Date, the Benefit Commencement
Date of a Participant whose benefits under the Plan have not
commenced by January 1, 2007 shall be determined in accordance with
(i) and (ii) below:
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(i)
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The Benefit Commencement Date for
the Participant’s Grandfathered Benefit shall be the
Participant’s Qualified Plan Annuity Starting
Date.
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(ii)
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The Benefit Commencement Date
for the Participant’s Non-Grandfathered Benefit shall be the
first day of the month following the later of:
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(A)
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the Participant’s
Separation from Service; and
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(B)
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(I)
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the first day of the month following
the month in which the Participant’s 60
th birthday occurs, if the Participant has
completed at least 20 or more years of “Credited
Service” (as such term is defined in the Qualified Plan as
defined in the Qualified Plan on January 1, 2009); or
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(II)
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the first day of the month following
the month in which the Participant’s 65
th birthday occurs, if the Participant has not
completed at least 20 years of “Credited Service” (as
such term is defined in the Qualified Plan as of January 1,
2009).
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In lieu of the Benefit Commencement
Date specified in paragraph (b) above and subject to Section 2.06,
a Participant whose benefits under the Plan have not commenced by
January 1, 2007 and who is not eligible for benefits under Appendix
A may elect to have the Benefit Commencement Date applicable to his
or her Non-Grandfathered Benefit be one of the following
dates:
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the first day of the month following
the Participant’s Separation from Service; or
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the first day of the month following
the later of the Participant’s Separation from Service and
the date specified by the Participant, provided that such specified
date may not be earlier than age 55 nor later than the first day of
the month following the Participant’s 65
th birthday;
provided, however, that unless the
Participant has completed at least 20 years of “Credited
Service” (as such term is defined in the Qualified Plan on
January 1, 2009 or, if applicable, as provided in an Appendix) as
of his or her Separation from Service, the Participant’s
election under this paragraph (c) shall not be given
effect.
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Upon the Committee’s approval
of an Eligible Employee’s initial participation in the Plan
but prior to the calendar year in which such Eligible
Employee’s participation is effective (except as otherwise
provided for in an Appendix in accordance with Code Section 409A),
the Eligible Employee may elect a Benefit Commencement Date set
forth in paragraph (b) above and such election shall become
effective and irrevocable, except as allowed in paragraph (e) below
and otherwise in accordance with Code Section 409A, on the date the
Eligible Employee becomes a participant in the Plan provided such
election is received by the Committee prior to such
date.
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Unless otherwise made in accordance
with paragraph (d) above or as otherwise provided under the
provisions of Code Section 409A for a Participant who is employed
on or after January 1, 2008, an election pursuant to paragraph (c)
above:
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shall become effective 12 months
after the date such election is made;
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must be made at least 12 months
prior to the date payments to the Participant would otherwise
commence pursuant to the Plan; and
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the new Benefit Commencement Date
under such election must be at least 5 years after the date
payments to the Participant would otherwise commence pursuant
to the Plan above.
Notwithstanding the foregoing
provisions of this paragraph (e), an election pursuant to paragraph
(c) that is made in accordance with a transition rule or other
applicable provision under Code Section 409A shall become effective
on the date such election is made and shall not be subject to the 5
year delay. For purposes of this paragraph (e), an
election is deemed to be made on the date such election is received
by the Committee.
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Notwithstanding the foregoing
provisions of this paragraph (e), an election pursuant to paragraph
(c) that is made in accordance with a transition rule or other
applicable provision under Code Section 409A shall become effective
on the date such election is made and shall not be subject to the 5
year delay. For purposes of this paragraph (e), an
election is deemed to be made on the date such election is received
by the Committee.
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Anything in the Plan to the contrary
notwithstanding, no distribution shall be made that would cause the
Plan to violate Code Section 409A.
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Timing of Payment for a
“Specified Employee”
Notwithstanding any provision of the
Plan to the contrary, the actual payment of a Non-Grandfathered
Benefit to a Participant who is classified as a “Specified
Employee” as determined under procedures adopted by the Board
of Directors of the Corporation or its delegate in accordance with
Code Section 409A, on account of such Specified
Employee’s Separation from Service (for reasons other than
death or disability) shall not commence prior to the first day of
the seventh month following the Specified Employee’s
Separation from Service. Except as otherwise provided in
Appendix A, any payment of a Non-Grandfathered Benefit to the
Specified Employee which he or she would have otherwise received
under Section 2.02 during the six-month period immediately
following such Specified Employee’s Separation from Service
shall be paid with interest for that six-month period at one-half
of the prime rate as published in the Wall Street Journal on the
last day of the last calendar quarter that ends within such
six-month period, such prime rate first rounded to the nearest
.25%, within 30 days after the later of (a) the first day of
seventh month following the Specified Employee’s Separation
from Service, and (b) the Specified Employee’s Benefit
Commencement Date.
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Disability
Retirement
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In the event the Participant
receives a Disability Retirement Allowance under the Qualified
Plan, the Grandfathered Benefit shall be paid at the same time and
in the same form as, and subject to the same rules as (including
the suspension and termination provisions), the Participant’s
Disability Retirement Allowance under the Qualified
Plan. Such benefit shall not be reduced for early
commencement.
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At the time an Eligible Employee
makes his election under Section 2.05(d) or, on or
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