SOUTHERN
CALIFORNIA EDISON COMPANY
EXECUTIVE
SUPPLEMENTAL BENEFIT PROGRAM
As Amended
December 31, 2008
This
Executive Supplemental Benefit Program (“Program”) was
originally effective March 15, 1978, and as thereafter amended
consists of several parts or plans, each paid for by the Company:
Part (A) “Survivor Income Continuation,” Part (B)
“Supplemental Survivor Income,” Part (C)
“Supplemental Survivor Income/Retirement Income” (which
further consists of separate death benefit and retirement plans),
and Part (D) “Supplemental Long-Term Disability.” Each
separate part or plan that is included within this Program is
intended to be a separate plan within the meaning of
Section 409A of the Internal Revenue Code of 1986 (as amended,
the “Code”) and Treasury Regulation
Section 1.409A-1(c).
Eligible
members (hereinafter referred to as “Participants”) are
automatically provided coverage under the “Survivor Income
Continuation” and the “Supplemental Long-Term
Disability” parts of the Program. The “Supplemental
Survivor Income” and the “Supplemental Survivor
Income/Retirement Income” parts are in the alternative and
employees who became eligible to participate irrevocably elected
coverage under one or the other, but not both prior to
January 1, 2005. It is the intention of the Company to
continue these plans indefinitely, but they are subject to
cancellation or amendment as may be required by law or as deemed
appropriate by the Board of Directors except with respect to rights
which have matured by reason of death, disability, or retirement of
a Participant.
Individual
eligibility and participation in these plans are subject to the
terms and conditions set forth below and are only available to
those employees whose participation was approved by the Chairman of
the Board and Chief Executive Officer and who either
(1) retired on or before January 1, 1993, or
(2) were participants in these plans as of December 31,
1992 and did not elect in 1993 or 1994 to cease participation in
these plans in favor of participation in the Executive Survivor and
Disability Benefit Program. No benefits will be paid under these
plans with respect to any employee who terminates his or her
employment with the Company prior to retirement for any reason
other than death or Separation from Service as defined in the
Edison International 2008 Executive Severance Plan (the
“Severance Plan”) such that the employee is eligible
for benefits under the Severance Plan.
Notwithstanding
the foregoing, if a Participant who is eligible under this Program
becomes entitled to receive severance benefits under the Severance
Plan or any similar successor plan as in effect upon the
Participant’s Separation from Service, then such Participant
shall be entitled to continued coverage under this Program with the
same terms applicable for an eligible active employee for the
one-year period commencing on the Participant’s Termination
Date (as defined in the Severance Plan) (in the case of a
Separation from Service during the Protected Period associated with
a Change in Control due to severance or resignation for Good Reason
(as such terms are defined in the Severance Plan), two years for
Senior Vice Presidents and Presidents and other officers designated
by the CEO of Edison International to be in Executive Compensation
Band D or above, but three years for the Chief Executive Officer of
Edison International, Southern California Edison Company, or Edison
Mission Group, or the General
1
Counsel or
Chief Financial Officer of Edison International). If the
Participant is entitled to a Retirement Income benefit under
Section 4 of Part C and becomes entitled to receive
severance benefits under the Severance Plan or any similar
successor plan as in effect upon the Participant’s Separation
from Service, then the Participant will be entitled to an
additional one year of age credit beyond the Participant’s
age on his or her Termination Date for purposes of the Retirement
Income benefit calculation (in the case of a Separation from
Service during the Protected Period associated with a Change in
Control due to severance or resignation for Good Reason (as such
terms are defined in the Severance Plan), two years for Senior Vice
Presidents and Presidents and other officers designated by the CEO
of Edison International to be in Executive Compensation Band D or
above, but three years for the Chief Executive Officer of Edison
International, Southern California Edison Company, or Edison
Mission Group, or the General Counsel or Chief Financial Officer of
Edison International).
Part A.
Survivor Income Continuation Plan
1. The
basic Survivor Income Continuation benefit for Participants prior
to retirement shall be an annual amount equal to 63% of the
Participant’s total compensation, including final annual base
salary and any Executive Incentive Compensation Awards. For
purposes of the Executive Supplemental Benefit Program, the dollar
amount of any Executive Incentive Compensation Awards shall be
determined by applying the average percentage awards received in
the three (3) highest years out of the last five
(5) years (except for periods of less than three
(3) years, in which case the highest percentage award received
will be used). This percentage will then be applied to the
Participant’s final annual base salary to arrive at a dollar
amount which will be added to the Participant’s final annual
base salary. This total dollar amount, rounded to the next highest
thousand dollars, will be the Participant’s “Total
Compensation” for purposes of the Executive Supplemental
Benefit Program.
Survivor
Income Continuation payments shall continue for ten (10) years
following the Participant’s death. Payments shall be made in
equal monthly installments commencing within 90 days following the
date of death, and such payments shall be made to the
Participant’s then living spouse or other designated
beneficiary, if any. If, under this Survivor Income Continuation
Plan, a Participant or beneficiary dies under circumstances in
which benefits are payable but there is no beneficiary designation,
or all other beneficiaries predeceased such Participant or
designated beneficiary, any remaining payments shall be made to the
estate of whomever was last receiving benefit payments.
In
determining the basic benefit of 63% of Total Compensation payable
for 10 years, the Company has initially assumed a 10% nominal
interest rate and a 50% marginal federal income tax rate. The basic
benefit percentage of 63% (or 31.5% in the case of retired
participants as described below) may be increased or decreased at
the sole discretion of the Company because of changes in the
interest rate assumption or in the tax rate assumption. However,
any such changes in the basic benefit percentage will be made by
the Company so that the after-tax dollar amount payable to the
survivor(s) under this Part A will, as much as possible,
approximate the after-tax dollar benefits which would have been
paid under the prior plan before the Program was amended on
December 20, 1984.
2
2. For
those employees who retire and are participating in this
Part A, the basic post-retirement Survivor Income Continuation
benefit shall be an amount equal to 31.5% of the employee’s
Total Compensation, including final annual base salary and any
Executive Incentive Compensation Award (determined pursuant to
Section 1 hereof) and shall become payable upon the death of
the Participant. Any such post-retirement payments shall be made
over 10 years, as described in Section 1
above.
3. In
addition to the basic benefit described in Section 1 above, a
death benefit may also be available (in addition to any other
benefits) if death occurs prior to retirement under circumstances
which qualify as “accidental death” as defined in any
master accidental death and dismemberment insurance policy which
may be maintained by the Company. This accidental death benefit
will be in an amount equal to a basic benefit coverage of two times
the sum of the Participant’s annual base salary, plus any
awards under the Executive Incentive Compensation Plan, determined
according to Section 1 hereof.
Part B.
Supplemental Survivor Income Plan
Participation
in this Part shall be available to employees (i) whose
participation has been approved by the Chairman of the Board and
Chief Executive Officer and (ii) who executed, on a form
provided pursuant hereto within the prescribed time limit and in
all cases prior to January 1, 2005, an election to be covered
hereunder instead of under Part C, the Supplemental Survivor
Income/Retirement Income Plan. Beneficiary designations shall be
made on a form provided pursuant hereto and may be modified at any
time unless the designation is specified as irrevocable, in which
case, no subsequent beneficiary designation shall be
valid.
Upon
the death prior to retirement of a Participant, an annuity shall be
payable as follows:
(a) If
the designated beneficiary is the surviving spouse of the
Participant (or a spouse at the time of beneficiary designation,
but not at death), the amount of this benefit will be a lifetime
monthly annuity payment. The monthly amount of this benefit will be
equal to one twelfth (1/12) of 25% of the sum of the
Participant’s annual base salary at the time of death plus
the amount of any Executive Incentive Compensation Awards
(determined according to Section 1 of Part A hereof).
This monthly benefit shall be paid in equal monthly installments
commencing within 90 days following the date of death. Such
payments will be for a minimum of ten years and, should the
surviving spouse die less than ten years after the Participant, any
remaining benefits will be payable to the successor beneficiary
designated by the Participant or, if there be none, to the
spouse’s designated beneficiary in the same manner as the
payments had been made to the spouse for the remainder of any such
ten year period. If the surviving spouse (or designated former
spouse) is more than three years younger than the Participant, the
lifetime monthly annuity benefit shall be calculated as follows:
(i) the present value of the benefit payable shall be
calculated as if such spouse were three years younger than the
Participant;
3
(ii) such
present value shall be converted to a monthly benefit amount based
on the actuarial life expectancy of the actual surviving spouse (or
surviving designated former spouse) and shall be determined using
(i) the interest rate assumption determined pursuant to
Section 1 of Part A hereof, and (ii) 1983 Group
Annuity Mortality table.
(b) If
the Participant designates a beneficiary or beneficiaries (other
than his or her spouse or a former spouse eligible for benefits
under the preceding paragraph) such beneficiary or beneficiaries
will receive a monthly benefit to be determined as follows. The
amount of this monthly benefit will be equal to one-twelfth (1/12)
of 25% of the sum of the Participant’s annual base salary at
the time of death plus the amount of any Executive Incentive
Compensation Awards (determined according to Section 1 of
Part A hereof). This monthly benefit shall be paid in equal
monthly installments commencing within 90 days following the
date of death. Such payments shall continue for a period equal to
the assumed life expectancy of a spouse three years younger than
the Participant at the time of the Participant’s death, using
the 1983 Group Annuity Mortality table. This benefit shall be
payable for a minimum of ten years, and should a beneficiary die
less than ten years after the death of the Participant, any unpaid
benefits remaining for this ten-year period shall be payable to the
successor beneficiary designated by the Participant or, if there be
none, to whomever his or her beneficiary designates.
(c) If,
under this Supplemental Survivor Income Plan, a Participant or
beneficiary dies under circumstances in which benefits are payable
but there is no beneficiary designation, or all other beneficiaries
predeceased such Participant or designated beneficiary, any
remaining payments shall be made to the estate of whomever was last
receiving benefit payments.
3. Post-retirement
Benefit
Upon
the death after retirement of a Participant, his or her beneficiary
shall be paid a monthly benefit in an amount equal to one-twelfth
(1/12) of 25% of the sum of the Participant’s annual base
salary (immediately prior to retirement) plus the amount of any
Executive Incentive Compensation Awards (determined according to
Section 1 of Part A hereof). This monthly benefit shall
be paid in equal monthly installments commencing within
90 days following the date of death. This benefit will be
payable for ten years only and, should the designated beneficiary
(or subsequent beneficiary) die prior to the expiration of such ten
year period, any remaining payments will be continued, until
exhausted, to the successor beneficiary designated by the
Participant or, if there be none, to whomever the beneficiary
designates.
If,
under this Supplemental Survivor Income Plan, a Participant or
designated beneficiary dies under circumstances in which benefits
are payable but there is no beneficiary designation, or all other
beneficiaries have predeceased such Participant or beneficiary, any
remaining payments shall be paid to the estate of whomever was last
receiving benefit payments.
4
Part C.
Supplemental Survivor Income/Retirement Income Plan
Participation
in this part shall be available to employees (i) whose
participation has been approved by the Chairman of the Board and
Chief Executive Officer and (ii) who executed, on a form
provided pursuant hereto within the prescribed time limit and in
all cases prior to January 1, 2005, an election to be covered
hereunder instead of under Part B, the Supplemental Survivor
Income Plan. Beneficiary designations shall be made on a form
provided pursuant hereto and may be modified at any time unless the
designation is specified as irrevocable, in which case, no
subsequent beneficiary designation shall be valid. For the
avoidance of doubt, the Supplemental Survivor Income and Retirement
Income sections of this Part C are each intended as a separate
plan within the meaning of Section 409A of the Code and
Treasury Regulation Section 1.409A-1(c).
Upon
the death, prior to retirement of a Participant, an annuity shall
be payable as follows:
(a) If
the designated beneficiary is the surviving spouse of the
Participant (or a spouse at the time of beneficiary designation,
but not at death), the amount of this benefit will be a lifetime
monthly annuity payment. The monthly amount of this benefit will be
equal to one-twelfth (1/12) of 25% of
|
