XCEL ENERGY NONQUALIFIED DEFERRED COMPENSATION PLAN

 

(2009 Restatement)

 

TABLE OF CONTENTS

 

SECTION 1  INTRODUCTION				1
	1.1	Purpose		1
	1.2	Definitions		1
		1.2.1	Account	1
		1.2.2	Administrator – means the Committee or such other person or persons designated by the Committee as provided in Section 9.	2
		1.2.3	Affiliate	2
		1.2.4	Annual Incentive Bonus	2
		1.2.5	Annual Valuation Date	2
		1.2.6	Base Salary	2
		1.2.7	Beneficiary	2
		1.2.8	Beneficiary Designation Form	2
		1.2.9	Code	2
		1.2.10	Committee	2
		1.2.11	Distribution Election Form	2
		1.2.12	Effective Date	2
		1.2.13	Employer	3
		1.2.14	Employer Discretionary Credit Subaccount	3
		1.2.15	Employer Matching Credit Subaccount	3
		1.2.16	Financial Hardship	3
		1.2.17	Investment Election Form	3
		1.2.18	Investment Fund	3
		1.2.19	Participant	4
		1.2.20	Plan	4
		1.2.21	Plan Statement	4
		1.2.22	Plan Year	4
		1.2.23	Pre-Tax Deferrals	4
		1.2.24	Pre-Tax Deferral Subaccount	4
		1.2.25	Principal Sponsor	4
		1.2.26	Separation from Service	4
		1.2.27	Transfer Subaccount	5
		1.2.28	Trust	5
		1.2.29	Trust Fund	5
		1.2.30	Trustee	5

 

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		1.2.31	Valuation Date	5
	1.3	Rules of Interpretation		5
SECTION 2  PARTICIPATION				7
	2.1	Eligibility		7
		2.1.1	Initial Plan Year of Participation	7
		2.1.2	Ongoing Participation	7
	2.2	Cessation of Eligibility		7
SECTION 3  CREDITS AND ADJUSTMENTS OF ACCOUNTS				8
	3.1	Credits		8
		3.1.1	Employee Deferrals	8
	3.2	Rules Regarding Participant Contributions		8
		3.2.1	Timing	8
		3.2.2	Irrevocable	8
		3.2.3	Crediting of Deferred Compensation	8
	3.3	Employer Credits		9
	3.4	Adjustments of Account		10
		3.4.1	Initial Election of Investment Funds	10
		3.4.2	Changes to Investment Fund Elections	10
		3.4.3	Debits and Credits to Accounts	10
		3.4.4	Phantom Stock	11
	3.5	No Actual Investment		11
	3.6	FICA and Other Taxes		11
SECTION 4  VESTING OF ACCOUNT				12
SECTION 5  PAYMENT				13
	5.1	Participant Election of Time and Form of Payment		13
	5.2	Time of Payment		13
	5.3	Form of Payment		13
		5.3.1	Term Certain Installments	13
		5.3.2	Lump Su	13
		5.3.3	Default	13
	5.4	Small Amounts		14
	5.5	Subsequent Distribution Election		14
	5.6	Transitional Elections		14
	5.7	Payment on Death of Change in Control		14
		5.7.1	Death	14
		5.7.2	Change in Control	14
	5.8	Payment to Beneficiary		15
	5.9	Withholding of Taxes		15

 

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	5.10	Acceleration of Payments		15
		5.10.1	Financial Hardship Distribution	15
		5.10.2	Payment of Employment Taxes or Income Taxes	15
		5.10.3	Payment upon Income Inclusion under Code §409A	15
		5.10.4	Conflicts of Interest	15
		5.10.5	Termination of Plan	16
	5.11	Delay of Payments		16
	5.12	Application for Payment		16
	5.13	Rehired Employee		16
	5.14	Designation of Beneficiaries		16
		5.14.1	Right to Designate	16
		5.14.2	Failure of Designation	17
		5.14.3	Definitions	17
		5.14.4	Special Rules	17
		5.14.5	No Spousal Rights	17
	5.15	Death Prior to Full Distribution		18
	5.16	Facility of Payment		18
	5.17	Payment Obligations of Participating Employers		19
SECTION 6  UNFUNDED PLAN				20
	6.1	Establishment of Trust		20
	6.2	Funding and Location of Trust		20
	6.3	Interrelationship of the Plan and the Trust		20
	6.4	Distributions from the Trust		20
	6.5	Spendthrift Provision		20
SECTION 7  AMENDMENT AND TERMINATION				21
	7.1	Amendment		21
	7.2	Termination		21
		7.2.1	Dissolution or Bankruptcy	21
		7.2.2	Discretionary Termination	21
SECTION 8  DETERMINATIONS – RULES AND REGULATIONS				22
	8.1	Determinations		22
	8.2	Rules and Regulations		22
	8.3	Method of Executing Instruments		22
	8.4	Claims Procedure		22
		8.4.1	Original Claim	22
		8.4.2	Review of Denied Claim	22
		8.4.3	General Rules	23
	8.5	Information Furnished by Participants		24

 

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SECTION 9  PLAN ADMINISTRATION				25
	9.1	Principal Sponsor		25
		9.1.1	Officers	25
		9.1.2	Chief Executive Officer	25
	9.2	Committee		25
		9.2.1	Appointment and Removal	25
		9.2.2	Automatic Removal	25
		9.2.3	Authority	25
		9.2.4	Majority Decisions	26
	9.3	Limitation on Authority		26
		9.3.1	Generally	26
		9.3.2	Trustee	26
	9.4	Conflict of Interest		27
	9.5	Dual Capacity		27
	9.6	Administrator		27
	9.7	Service of Process		27
	9.8	Administrative Expenses		27
SECTION 10  DISCLAIMERS				28
	10.1	Term of Employment		28
	10.2	Source of Payment		28
	10.3	Delegation		28
ADDENDUM A  DESIGNATED EMPLOYERS AND DESIGNATED AFFILIATES				29

 

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XCEL ENERGY INC. NONQUALIFIED DEFERRED COMPENSATION PLAN

 

(2009 Restatement)

 

SECTION 1

 

INTRODUCTION

 

1.1                                 Purpose .  Effective January 18, 1980, Northern States Power Company (NSP) established the NSP Deferred Compensation Plan.  That Plan was restated as amended through January 1, 1992 (The “NSP 1992 Plan”). Effective July 1, 1998, New Century Energies, Inc. (NCE) established the Salary Deferral and Supplemental Savings Plan for Executive Officers, and the Salary Deferral and Supplemental Savings Plan for Key Managers (the NCE Nonqualified Plans). (For convenience, the foregoing plans are collectively referred to herein as the “Former Nonqualified Plans”).  Effective January 1, 2000, NSP established the NSP Nonqualified Deferred Compensation Plan (2000 Statement).

 

As of August 2000, NSP and NCE merged to become Xcel Energy Inc.  Effective January 1, 2002, the NSP Nonqualified Deferred Compensation Plan (2000 Statement) and the Former Nonqualified Plans were combined into one plan statement and the name of the Plan was changed to the “Xcel Energy Inc. Nonqualified Deferred Compensation Plan,” effective as to amounts credited to Accounts on and after January 1, 2002.

 

Effective January 1, 2009, this Plan was again amended and restated to include all amendments issued after the January 1, 2002 restatement effective date, and to cause the Plan to be compliant with Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance issued thereunder. During the period from and after January 1, 2005 through the effective date of this restatement, the Plan has been operated in good faith compliance with IRS Notice 2005-1, proposed and final regulations under Code Section 409A and other applicable guidance. Pursuant to such guidance, Participants were provided the opportunity to make transitional elections regarding the payment of their Accounts as described in Section 5.

 

This Plan is a nonqualified, unfunded elective deferral plan for the purpose of allowing a select group of management and highly compensated employees of the Principal Sponsor and other Employers to defer the receipt of certain compensation which would otherwise be paid to those employees pursuant to the terms set forth herein.

 

1.2                                 Definitions .  When the following terms are used herein with initial capital letters, they shall have the following meanings:

 

1.2.1                       Account – the separate bookkeeping account(s) representing the unfunded and unsecured general obligation of the Employer that are maintained for the purpose of determining each Participant’s or Beneficiary’s interest in the Plan. To the extent determined by the Committee, the Committee may establish a separate Pre-Tax Deferral Subaccount, a separate Transfer Subaccount, a separate Employer Matching Credit Subaccount, a separate Employer Discretionary Credit Subaccount, and such other accounts and subaccounts as it determines from time to time to be advisable, for one or

 

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more Participants. For convenience, and unless the context otherwise indicates, “Account” shall refer to a Participant’s or Beneficiary’s entire interest under the Plan.

 

1.2.2                       Administrator – means the Committee or such other person or persons designated by the Committee as provided in Section 9.

 

1.2.3                       Affiliate – a business entity that is at least 50% owned or affiliated in ownership with the Principal Sponsor, as defined in regulations issued under Section 409A of the Code.

 

1.2.4                       Annual Incentive Bonus – the annual incentive bonus, if any, payable to a Participant from time to time pursuant to the Xcel Energy Inc. Executive Annual Incentive Award Plan and the Xcel Energy Inc.  Non-bargaining Business Unit Vice President Managing Director and Employee Incentive Plan, or any similar annual incentive plans established by an Employer and recognized by the Committee as an Annual Incentive Bonus for purposes of this Plan.

 

For purposes of this Section, an Annual Incentive Bonus may be considered “performance based compensation” if the award is based on services performed over a period of at least twelve months and meets the definition of performance based compensation found in Code Section 409A and the regulations issued thereunder.

 

1.2.5                       Annual Valuation Date – each December 31.

 

1.2.6                       Base Salary – a Participant’s regular annual base salary in effect from time to time during each Plan Year, unreduced for any salary deferrals under any Employer savings, incentive or other employee benefit plan, whether or not the same is qualified under section 401(a) of the Code.

 

1.2.7                       Beneficiary – a person designated on a Beneficiary Designation Form in writing by a Participant (or automatically by operation of this Plan Statement) to receive all or a part of the Participant’s Account in the event of the Participant’s death prior to full distribution thereof.  A person so designated shall not be considered a Beneficiary until the death of the Participant.

 

1.2.8                       Beneficiary Designation Form  – the form prescribed by the Committee upon which a Participant may designate a Beneficiary.

 

1.2.9                       Code – the Internal Revenue Code of 1986, as amended from time to time.

 

1.2.10                 Committee – a Committee appointed pursuant to Section 9.

 

1.2.11                 Distribution Election Form  – the form prescribed by the Committee pursuant to which a Participant may elect a form of distribution of his or her Account under the Plan as provided by Section 5.3.

 

1.2.12                 Effective Date – January 1, 2002.  The Effective Date of this Restatement is January 1, 2009 except as otherwise provided herein.

 

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1.2.13                 Employer – the Principal Sponsor and any business entity that is designated by the Principal Sponsor and identified on Addendum A as employing employees that are eligible to be selected to participate in this Plan.

 

1.2.14                 Employer Discretionary Credit Subaccount – the Account, if any, maintained for a Participant to which is credited Employer discretionary credits.  The amount of any such credit shall be determined in the sole discretion of the Employer and may be subject to such vesting schedule(s), restrictions and other conditions as the Employer may determine in its sole discretion.  Any amounts so credited on behalf of any Participant may be smaller or larger than for any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a discretionary Employer credit for such year.  The time and manner of payment of such discretionary credit shall be decided no later than the later of (a) the time the Participant has a legally binding right to the compensation, or (b) the time by which the Participant would be required to make an election under Code §409A (whether or not the Participant in fact is allowed to elect the time and form of payment).

 

1.2.15                 Employer Matching Credit Subaccount – the Account, if any, maintained for a Participant to which is credited Employer matching credits pursuant to Section 3.3(c).

 

1.2.16                 Financial Hardship – means an unforeseeable emergency which is a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in Code §152, without regard to Code §§152(b)(1), (b)(2), and (d)(1)(B)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control. Examples include, but are not limited to, the imminent foreclosure of or eviction from the Participant’s primary residence, the need to pay for medical expenses, including non-refundable deductibles and the costs of prescription drug medication, the need to pay for the funeral expenses of a spouse, a Beneficiary, or a dependent (as defined above).  Whether a Participant is faced with an unforeseeable emergency is to be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not cause severe financial hardship), or by cessation of deferrals under the Plan. Financial Hardship distributions must be limited to the amount reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay any Federal, state, local, or foreign income taxes or penalties reasonably anticipated to result from the distribution).  Examples of what are not considered to be unforeseeable emergencies include the need to send a Participant’s child to college or the desire to purchase a home.

 

1.2.17                 Investment Election Form  – the form prescribed by the Committee from time to time pursuant to which a Participant may select the hypothetical investment of his or her Account pursuant to the provisions of Section 3.

 

1.2.18                 Investment Fund – any of the hypothetical investment funds established by the Committee pursuant to the provisions of Section 3.

 

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1.2.19                 Participant – an employee (other than an employee whose employment terms are subject to a collective bargaining agreement) of an Employer who is a member of a select group of management or highly compensated employees and who elects to participate in this Plan.  Effective on and after January 1, 2009, an employee is considered highly compensated for purposes of the preceding sentence if his or her Base Salary is equal to or greater than $150,000. Notwithstanding the preceding sentence, a Participant who had participated, but because his or her Base Salary is less than $150,000 is otherwise no longer be eligible to participate, may continue to make Pre-Tax Deferrals provided he or she continues to do so on an annual basis.  In addition, an employee or former employee of an Employer shall be considered a Participant in this Plan if he or she has otherwise accrued a benefit under the terms of the Plan as a result of the transfer of a Former Nonqualified Plan to this Plan or because of an Employer credit to such employee or former employee.

 

1.2.20                 Plan – the nonqualified, income deferral program maintained by the Principal Sponsor established for the benefit of Participants eligible to participate therein, as set forth in this Plan Statement.  (As used herein, “Plan” does not refer to the documents pursuant to which the Plan is maintained.  Those documents are referred to herein as the “Plan Statement”).  The Plan shall be referred to as the “Xcel Energy Inc.  Nonqualified Deferred Compensation Plan.”

 

1.2.21                 Plan Statement – this document entitled “XCEL ENERGY INC. NONQUALIFIED DEFERRED COMPENSATION PLAN (2009 Restatement)” as adopted by the Principal Sponsor effective as of January 1, 2009, as the same may be amended from time to time thereafter.

 

1.2.22                 Plan Year – the twelve (12) consecutive month period ending on any Annual Valuation Date.

 

1.2.23                 Pre-Tax Deferrals – the Base Salary and Annual Incentive Bonus deferrals made to the Plan pursuant to the provisions of Section 3.

 

1.2.24                 Pre-Tax Deferral Subaccount – the Account maintained for each Participant to which is credited such Participant’s Pre-Tax Deferrals pursuant to Section 3.1.2, below.

 

1.2.25                 Principal Sponsor – Xcel Energy Inc., a Minnesota corporation.

 

1.2.26                 Separation from Service – means:

 

(a)                                   An Employee’s death, retirement or other termination of employment, from the Employer and all Affiliates.  A Separation from Service shall not be considered to have occurred and the Participant’s employment relationship is treated as continuing while the Participant is on military leave, sick leave, or other bona fide leave of absence if such period of leave does not exceed 6 months or, if longer, so long as the Participant’s right to reemployment is provided by statute or by contract.  If the period of leave exceeds 6 months and such reemployment rights are not provided, then the Participant is deemed to have a termination of employment as of the first date immediately following such 6-month period.

 

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(b)                                  A termination of employment will occur as of a specified date if the facts and circumstances indicate that (1) the Employer and the Participant reasonably anticipated that no further services would be performed after that date or (2) the level of bona fide services the Participant would perform after that date (whether as an employee or an independent contractor) would permanently decrease to 20% or less of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of such services, if less than 36 months).

 

(c)                                   A Participant is presumed to (1) have incurred a termination of employment from the Employer and all Affiliates where the level of bona fide services the Participant performs after such date decreases to a level equal to 20% or less of the average level of services performed by the Participant over the immediately preceding 36-month period (on the full period of such services, if less than 36 months); and (2) not to have incurred a termination of employment from the Employer and all Affiliates where the level of bona fide services the Participant performs after such date continues at a level equal to 50% or more of the average level of services performed by the Participant over the immediately preceding 36-month period (or the full period of such services, if less than 36 months).  These presumptions can be rebutted by showing that the Employer and the Participant reasonably anticipated that there either would or would not have been a Separation from Service in accordance with paragraph (b).

 

(d)                                  In the case of a Participant who is an independent contractor, Separation from Service means the expiration of the contract (or, as applicable, all contracts) under which services are performed for the Employer or any Affiliate if the expiration constitutes a good faith and complete termination of the contractual relationship.

 

1.2.27                 Transfer Subaccount – the Account, if any, maintained for a Participant to which is credited some part or all of the benefits of the Participant under any other nonqualified plan maintained by the Employer or any Former Nonqualified Plan.  Such amounts may be transferred to this Plan only upon the approval of the Committee, subject to such rules and conditions as the Committee may impose, and only if the Committee determines that such transfer can occur in a manner that does not violate the requirements of Code §409A.

 

1.2.28                 Trust – the Trust agreement, if any, for the Plan, which shall be a grantor trust, established by the Principal Sponsor.

 

1.2.29                 Trust Fund – the fund or funds, if any, established by the Principal Sponsor pursuant to Section 6.

 

1.2.30                 Trustee – that person or entity, if any, which shall have been appointed by the Principal Sponsor to hold the assets of any Trust created pursuant to Section 6.

 

1.2.31                 Valuation Date – the last day of each calendar quarter of the Plan Year, and such other time or times as determined by the Committee.

 

1.3                                 Rules of Interpretation.   The following rules shall apply for purposes of interpreting this Plan.

 

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1.3.1               An individual shall be considered to have attained a given age on such individual’s birthday for that age (and not on the day before).  Individuals born on February 29 in a leap year shall be considered to have their birthdays on February 28 in each year that is not a leap year.

 

1.3.2               Whenever appropriate, words used herein in the singular may be read in the plural, or words used herein in the plural may be read in the singular; the masculine may include the feminine; and the words “hereof,” “herein” or “hereunder” or other similar compounds of the word “here” shall mean and refer to this entire Plan document and not to any particular paragraph or section of this Plan document unless the context clearly indicates to the contrary.

 

1.3.3               If, under the rules of this Plan, an election, form or other document (whether in written or electronic form) must be filed with or received by the Committee, it must be actually received by the Committee or its agent to be effective.  The determination of whether or when an election, form or other document has been received by the Committee shall be made by the Committee on the basis of what documents are acknowledged by the Committee to be in its actual possession without regard to any “mailbox rule” or similar rule of evidence.  The absence of a document in the Committee’s records and files shall be conclusive and binding proof that the document was not received.

 

1.3.4               The titles given to the various sections of this Plan document are inserted for convenience of reference only and are not part of this Plan document, and they shall not be considered in determining the purpose, meaning or intent of any provision hereof.

 

1.3.5               This Plan shall be construed and this Plan shall be administered to create an unfunded plan providing deferred compensation to a select group of management or highly compensated employees so that it is exempt from the requirements of Parts 2, 3 and 4 of Title I of the Employee Retirement Income Security Act of 1974 (ERISA) and qualifies for a form of simplified, alternative compliance with the reporting and disclosure requirements of Part 1 of Title I of ERISA.  It is further intended that this Plan shall satisfy the conditions for a deferral of income under the Code including but not limited to the provisions of Code §409A and in a manner that will not cause a Participant to be liable for the payment of interest and tax penalties which may be imposed under Code §409A.  If any provision of this Plan may be susceptible to more than one interpretation or to an interpretation that may result in the Plan’s failing to satisfy Code §409A, such provision shall be applied as construed in a manner that is consistent with the provisions of such Code section.

 

1.3.6               This document has been executed and delivered in the State of Minnesota and has been drawn in conformity to the laws of that State and shall, subject to the foregoing, be construed and enforced in accordance with the laws of the State of Minnesota.

 

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SECTION 3

 

CREDITS AND ADJUSTMENTS OF ACCOUNTS

 

3.1                                 Credits .

 

3.1.1                       Employee Deferrals .

 

(a)                                   Basic Base Salary Deferrals .  For each Plan Year, a Participant may elect to make a pre-tax Base Salary deferral of up to 75% of such Participant’s Base Salary (subject to any necessary withholding for payroll and other taxes), provided such Participant’s unreduced base salary (net of deferral election into this Plan) continues to exceed the maximum level of “Federal Insurance Contributions Act taxable wages” (i.e. the FICA taxable wage base), subject to any necessary withholding for payroll and other taxes.

 

(b)                                  Annual Incentive Bonus Deferrals .  For each Plan Year, a Participant may elect to make a pre-tax deferral of up to 100% of such Participant’s Annual Incentive Bonus, subject to any necessary withholding for payroll and other taxes.

 

3.2                                 Rules Regarding Participant Contributions .  Each deferral election made by a Participant shall be subject to the following rules and conditions:

 

3.2.1                       Timing .  A Participant’s deferral election shall be made and shall become effective as provided in Section 2.1.1 or Section 2.1.2 as applicable.  If a Participant fails to submit a deferral election when he or she is eligible to do so, such Participant shall be deemed to have elected not to contribute for the Plan Year to which such failure relates.

 

3.2.2                       Irrevocable .  Each Participant’s deferral election for a Plan Year shall be irrevocable and shall remain in effect for all such Base Salary and Annual Incentive Bonus paid during the Plan Year to which the Participant’s deferral election relates.  Notwithstanding the foregoing, a Participant’s contributions to the Plan shall cease upon the occurrence of any of the following events:

 

(a)                                   The Participant incurs a Financial Hardship, or receives a Financial Hardship distribution from this Plan or from the Xcel Energy 401(k) Savings Plan, in which case such Participant’s Pre-Tax Deferrals for the Plan Year in which such distribution is made shall be cancelled for the Plan Year of such Financial Hardship or Financial Hardship distribution and for the next following Plan Year;

 

(b)                                  The Participant’s Separation from Service;

 

(c)                                   The Participant’s death.

 

3.2.3                       Crediting of Deferred Compensation .  A Participant’s Pre-Tax Deferrals shall be credited to his Account as of the payroll date such compensation is withheld from the Participant’s paycheck, or as soon as reasonably practicable thereafter.

 

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3.3                                 Employer Credits .

 

(a)                                   Base Salary Deferrals .  Within a reasonable time following the date that the amount elected by the Participant as a Base Salary deferral would otherwise be paid to such Participant, the Employer shall credit the Participant’s Pre-Tax Deferral Subaccount with the amount of such contribution(s).

 

(b)                                  Annual Incentive Bonus Deferrals . Within a reasonable time following the date that the amount elected by the Participant as an Annual Incentive Bonus would otherwise be paid to such Participant, the Employer shall credit the Participant’s Pre-Tax Deferral Subaccount with the amount of such contributions.

 

(c)                                   Employer Matching Credits . At such time as the Administrator shall determine but no later than 180 days after the close of the Plan Year, the Employer Matching Credit Subaccount of each Participant (other than a Participant subject to the Traditional Benefit under the Xcel Energy Pension Plan) whose Base Salary exceeds the compensation limit that prohibits the Participant from receiving a full match within the Xcel Energy 401(k) Savings Plan (“Savings Plan”) shall be allocated an Employer Matching Credit.  Such Employer Matching Credit, if any, shall be calculated as follows:

 

(i)              The Base Salary Deferrals shall be divided by Deferred Compensation Eligible Earnings to determine the “Deferred Compensation Deferral Percentage.”  Deferred Compensation Eligible Earnings shall be defined as (A) the Participant’s Base Salary less (B) the maximum pre-tax contributions to the Savings Plan allowable under Code §402(g) divided by 8%.

 

(ii)           If the result of Section 3.3(c)(i) is less than 8%, the Employer Matching Credit will be 50% of the Participant’s Base Salary Deferrals.

 

(iii)        If the result of Section 3.3(c)(i) is more than 8%, the Employer Matching Credit will be 50% of 8% of the Deferred Compensation Eligible Earnings.

 

(d)                                  Employer Discretionary Credits . The amount of any such credit shall be determined in the sole discretion of the Employer and may be subject to such vesting schedule(s), restrictions and other conditions as the Employer may determine in its sole discretion.  Any amounts so credited on behalf of any Participant may be smaller or larger than for any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a discretionary Employer credit for such year.  Any such Employer credit shall be credited to the Participant’s Employer Discretionary Credit Subaccount.

 

(e)                                   Transfer Credits. Any benefits transferred to this Plan (whether by merger, transfer, substitution or otherwise) on behalf of a Participant from another nonqualified Plan of the Employer (including any Former Nonqualified Plan) shall be credited to this Plan at their fair market value at the time of the transfer.  Such amounts shall be credited to the Transfer Subaccount of the Participant, unless the Committee, in its discretion, determines that such amounts shall be credited to another account of the Participant.  Notwithstanding the foregoing, no

 

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transfer shall be made to this Plan unless such transfer and the form and payment of any transferred funds, can be made in a manner that does not violate the provisions of Code §409A.

 

3.4                                 Adjustments of Account . Subject to such rules as may be prescribed by the Committee from time to time, amounts shall be credited or debited to a Participant’s Account in connection with the deemed investment thereof as follows:

 

3.4.1                       Initial Election of Investment Funds .  In connection with a Participant’s initial enrollment into the Plan, a Participant shall elect one or more Investment Funds on an Investment Election Form filed with the Committee to be used as an index to determine the additional amounts to be credited or debited to such Participant’s Account.  If a Participant fails to select any Investment Fund or if a Participant’s election of an Investment Fund shall, for any reason, be ineffective, such Participant shall be deemed to have elected the Vanguard Prime M