Exhibit 10.9
ALLEGHENY ENERGY, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
Amended and Restated as of January 1, 2008
Allegheny
Energy, Inc. (the “Company”) hereby establishes the
Allegheny Energy, Inc. Nonqualified Deferred Compensation Plan (the
“Plan”).
1. Purpose And Effective
Date . The purpose of the Plan is to provide tax-deferred
savings to a select group of key executive – level employees
by allowing them to elect to defer compensation otherwise payable
to them under the Company’s Annual Incentive Plan (the
“AIP”). This Plan originally became effective upon its
approval by the Company’s Board of Directors (the
“Board”). The Plan is hereby amended and restated
effective January 1, 2008 to update the Plan for certain
changes in the applicable law and to make certain other clarifying
changes.
2. Administration .
Subject to all applicable legal requirements, including without
limitation, compliance with securities, tax or other laws, or
rules, regulations or regulatory interpretations thereof,
applicable to the Plan, or the requirements of the exchanges, and
any requirements of other governmental or regulatory authorities,
the Plan shall be administered by the Management Compensation and
Development Committee of the Board (the “Committee”),
which shall have the sole authority to construe and interpret the
terms and provisions of the Plan. The Committee’s actions
shall be final and binding on all persons and parties. The
Committee may retain any accounting, legal, clerical and other
services reasonably required by it in the administration of the
Plan. The Committee may agree to pay reasonable compensation for
such services, and the Company shall pay all of the reasonable
expenses of the administration of the Plan. In addition, the
Committee shall establish a process for (i) Plan participants
and beneficiaries to submit claims and (ii) making decisions
on claims under the Plan.
3. Eligibility and
Participation .
3.1 Eligibility to participate in the
Plan is limited to employees of the Company at the level of
director or above who are then eligible for participation in the
AIP.
3.2 Each individual eligible to
participate shall become a participant (a
“Participant”) by electing, pursuant to a deferred
compensation election form provided by or acceptable to the
Committee, to defer receipt of a percentage of “Eligible
Compensation” otherwise payable to such Participant with
respect to such calendar year. A deferral election shall be
irrevocable for the calendar year for which it is made and shall
terminate automatically at the end of such calendar year. For the
purposes hereof, a Participant’s “Eligible
Compensation” with respect to any calendar year shall mean
the amount, if any, of the award payable to such Participant with
respect to such year under the AIP (with such amount being
ordinarily payable in the following year absent a deferral election
hereunder). No deferral election may reduce a Participant’s
compensation below the amount necessary to satisfy applicable
employment taxes, the withholding requirements under applicable law
and the amount of any contributions which the individual may be
required to make or may have elected to make under other benefit
plans.
3.3 The Plan’s initial plan
year shall begin on the date on which this Plan is adopted by the
Board and end on December 31, 2004. Each Participant who
wishes to participate in the Plan and defer a portion of his or her
Eligible Compensation with respect to the initial plan year must
submit an election form no later than thirty days after the date
this Plan is adopted by the Board.
3.4 Subsequent plan years shall begin
on January 1 and end on December 31. Each eligible individual
who wishes to participate in the Plan and defer a portion of his or
her Eligible Compensation must submit an election form no later
than December 20 of the year immediately prior to the plan
year with respect to which the election is to be effective, or as
otherwise determined by the Committee. If an individual becomes
eligible for the Plan after the first day of any plan year, he or
she must file an election with the Committee no later than
30 days after such individual becomes eligible to participate
in the Plan; provided , however , that such election
shall apply only to Eligible Compensation earned after the date of
such election.
3.5 A Participant shall continue to
be a Participant until the entire amount due under the Plan, if
any, is paid to the Participant and/or his or her beneficiary. Each
Participant shall be bound by all of the terms and conditions of
the Plan, all rules and regulations established from time to time
by the Committee and all decisions made by the Committee in
accordance with the Plan. Each Participant must furnish to the
Committee all pertinent information and execute all forms,
agreements and other instruments requested by the Committee.
4. Crediting of Accounts
.
4.1 The Committee shall establish a
bookkeeping account (the “Account”) on behalf of each
Participant under the Plan. For each plan year, the Committee shall
accrue the amount of Eligible Compensation elected by the
Participant to be deferred under the Plan and credit each
Participant’s Account with such amount on the date such
Eligible Compensation would have otherwise been payable to the
Participant in the absence of an election hereunder. The Committee
shall credit and/or debit each Participant’s Account based
upon the performance of a Participant’s deemed investments in
a manner and at times prescribed by the Committee.
4.2 A Participant may elect in a
manner prescribed by the Committee to have a specified percentage
of his or her Account invested in one or more investment option(s)
made available by the Committee from time to time. In accordance
with any procedures established by the Committee, each Participant
may elect to change the deemed investment(s) of all or a portion of
his or her Account among the investment options then allowed by the
Plan. The Participant shall assume all risks in connection with the
value credited (or debited) to the Participant’s Account as a
result of his or her election. The Committee, in its sole
discretion, may add, delete or otherwise alter the investment
options at any time. Notwithstanding the foregoing, the investment
options made available to Participants under the Plan shall be
comparable to those which a participant may elect under the
Allegheny Energy Employee Stock Ownership and Savings Plan.
4.3 Statements will be sent to
Participants following the end of each year as to the value of
their Accounts as of December 31 of such year.
5. Payment of Benefits
.
2
5.1 Each Participant shall be 100%
vested at all times in amounts held in his or her Account.
5.2 At the time that a Participant
makes an election to defer Eligible Compensation for a particular
calendar year as described in Section 3, the Participant shall
make an irrevocable distribution election to have the Eligible
Compensation deferred for such calendar year (and any interest or
earnings accrued thereon) distributed to him in a single lump-sum
cash payment no later than 30 business days after: (i) the
first day of a calendar year that is no less than 12 months
and a day from the date of the distribution election, or
(ii) the date that the Participant has a Separation from
Service (as defined below) from the Company; provided ,
however , that no later than 30 business days after the
Participant’s Separation from Service from the Company, the
entire balance in the Participant’s Account shall be paid to
the Participant (or the Participant’s beneficiary, if
applicable) in a single lump-sum cash payment. In the event that a
Participant fails to make the election provided in
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