Exhibit 10(b)
MINNESOTA POWER AND AFFILIATED COMPANIES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated
Effective August 1, 1994)
TABLE OF CONTENTS
Page
SECTION 1. ESTABLISHMENT AND PURPOSE..............................1
1.1 Establishment of Plan..................................1
1.2 Purpose of the Plan....................................2
SECTION 2. DEFINITIONS............................................3
2.1 Definitions............................................3
2.2 Gender and Number......................................4
SECTION 3. ELIGIBILITY AND PARTICIPATION..........................4
3.1 Eligibility............................................4
3.2 Participation..........................................5
SECTION 4. BENEFITS...............................................5
4.1 Amount of Deferred Compensation........................5
4.2 Allocation of Deferred Compensation...................10
4.3 Elections for Payment Options.........................10
4.4 Normal Form of Payment of Benefits....................12
4.5 Maintenance of Accounts...............................12
4.6 Payment of Amount Credited
Under Section 4.1(b)..................................14
4.7 Payment of Unpaid Benefits
Upon Participant's Death..............................14
4.8 Distribution Upon Termination
Other Than Retirement, Death or Disability............14
4.9 Distribution Upon Disability..........................15
SECTION 5. ADMINISTRATION........................................15
5.1 Committee.............................................15
5.2 Uniform Rules.........................................16
5.3 Notice of Address.....................................16
5.4 Records...............................................16
5.5 Claims Procedure......................................16
5.6 Change of Law.........................................17
5.7 Generation-Skipping Tax...............................17
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Page
SECTION 6. GENERAL PROVISIONS....................................18
6.1 Nonassignability......................................18
6.2 Incompetency..........................................18
6.3 Employment Rights.....................................18
6.4 No Individual Liability...............................19
6.5 Illegality of Particular Provision....................19
6.6 Contractual Obligations...............................19
SECTION 7. AMENDMENT AND TERMINATION.............................19
7.1 Amendment and Termination.............................19
7.2 Reorganization of the Company.........................19
SECTION 8. APPLICABLE LAWS.......................................20
8.1 Applicable Laws ......................................20
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MINNESOTA POWER AND AFFILIATED COMPANIES
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(As Amended and Restated
Effective August 1, 1994)
SECTION 1. ESTABLISHMENT AND PURPOSE
1.1 Establishment of Plan. MINNESOTA POWER & LIGHT COMPANY (the
"Company" and also sometimes "Minnesota Power") established, effective as of
July 1, 1980, a Supplemental Retirement Plan for eligible executives of the
Company, such Plan to be known as the SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(THE "PLAN"). The Plan was established in order to provide supplemental current
or retirement benefits payable as provided hereafter solely from the general
assets of the Company. The Plan is intended to be exempt from the participation,
vesting, funding, and fiduciary requirements of Title 1 of the Employee
Retirement Income Security Act of 1974. Effective as of January 1, 1981, the
Plan was amended to include compensation attributable to the Company's Incentive
Compensation Plan in determining benefits under this Plan. Effective as of
January 1, 1982, the plan was amended to change the manner in which Incentive
Awards are accounted for when determining benefits payable at retirement under
Section 4.1. Effective December 1, 1982, the Plan was amended to change the
deferral and cash payment options of the Plan. The Plan was amended including
revisions through and including May 10, 1983, and restated in its entirety as of
January 1, 1983. The revisions included a provision to provide benefits that are
above the limitations under section 415 of the Internal Revenue Code. Effective
January 1, 1984, the Plan was amended to provide for a predetermined interest
rate of 10.5% to be used in determining the value of certain benefits under
Subsection 4.1(b) (1). Effective January 1, 1987 the Plan was amended to provide
for two additional investment choices for monies deferred under the Plan and to
make other minor changes to the Plan. Effective August 1, 1987, the Plan has
been amended to provide for a fixed rate of return of 8% under Section 4.4(a)
for deferral elections made after that date rather than a return that is the
greater of 10.5% or the Company's actual overall percentage return on capital,
and to make a minor change in
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the Plan name. Effective May 1, 1988 the Plan was amended so that benefits under
Subsection 4.1(c) and (d) are available only to active participants who were age
60 or older as of said date. Effective November 1, 1988, the Plan has been
amended to make revisions in certain discretions available to the Company and to
eligible participants. Effective January 1, 1990, the Plan has been amended to
remove participant choice with respect to the payment of benefits under section
4.1(b). The Plan has also been amended to eliminate the make-up of the 2% CORE
benefits, which were eliminated under the Supplemental Retirement Plan to
account for the Employee Stock Ownership Plan, and to provide for a make-up of
the Employee Stock Ownership Plan Partnership account allocation contribution.
Effective August 1, 1992, the Plan was amended to change the date retirement
benefits are due and payable from the last day of the month to the first day of
the month. Effective March 1, 1994, the Plan was amended to calculate the
monthly benefit provided under Section 4.1(b) using a final average earnings
calculation which combines Results Sharing with Incentive Compensation.
Effective August 1, 1994, the Plan was amended at Section 3.1 eliminate the
eligibility option of annual compensation in excess of $100,000, to allow
voluntary deferrals up to 15% of annual salary less deferrals allowable pursuant
to the Supplemental Retirement Plan, to provide for a present value calculation
at Section 4.1(d) using the interest assumption used for funding purposes under
the Minnesota Power and Affiliated Companies Employees Retirement Plan A, to
change options for measuring indexes for monies deferred under the Plan provided
in Section 4.5, and to make other minor administrative changes.
1.2 Purpose of the Plan. It is the purpose of this Plan to provide
eligible executives with benefits that will compensate them for limitations
which apply to the Minnesota Power and Affiliated Companies Supplemental
Retirement Plan (sometimes hereinafter the "Supplemental Retirement Plan") and
the Minnesota Power and Affiliated Companies Employee Stock Ownership Plan and
Trust (sometimes hereinafter the "Employee Stock Ownership Plan") and to provide
for the inclusion of compensation attributable to the Minnesota Power and
Affiliated Companies Incentive Compensation Plan (sometimes hereinafter the
"Incentive Compensation Plan"), effective January 1, 1981, in determining
benefits under this plan.
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SECTION 2. DEFINITIONS
2.1 Definitions. Whenever used in the Plan, the following terms shall
have the respective meanings set forth below, unless otherwise expressly
provided herein, and when the defined meaning is intended, the term is
capitalized:
(a) "Committee" means the committee with authority to administer the
Plan as provided under Subsection 5.1.
(b) "Company" means Minnesota Power & Light Company, also sometimes
referred to as Minnesota Power, and its affiliated companies,
Superior Water, Light and Power Company and Topeka Group, Inc.
(c) "Compensation" means the annual compensation of the employee for
the Plan year (excluding expense reimbursements and payment of any
Incentive Award previously deferred in a prior Plan year under the
Incentive Compensation Plan) as stated in the payroll records of
the Company and reportable on Treasury Form W-2 (or any comparable
successor form), including any amounts paid as bonuses or as other
special pay which the Company pays to the employee during such
year, plus any amount of annual compensation pay converted to
employee benefit contributions or contributions to the Company's
Executive Investment Plan I or Executive Investment Plan II, plus
any Incentive Award eligible for payment but first deferred during
such year, but excluding any amounts paid under this Plan and
imputed income (whether such imputed income is from automobile
use, life insurance premiums or any other source). In the case of
an employee who is employed jointly by the Company and an
affiliated company (as defined under the Supplemental Retirement
Plan) Compensation as defined in this subsection shall include
amounts received from all such companies. Compensation shall not
include amounts which an employee elects to receive in cash or
defers under this Plan, under the Supplemental Retirement Plan or
under the Flexible Compensation Plan for Nonunion Employees
(sometimes referred to hereinafter as the Flexible Compensation
Program).
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(d) "Pay" means the annual salary as of October 1 of the year prior to
the year for which an allocation is made under this Plan. In the
case of a participant who is employed jointly by the Company and
an affiliated company (as defined in the Supplemental Retirement
Plan), Pay as defined in this subsection shall include amounts
received from all such companies.
(e) "Retire" and "Retirement" mean a participant's termination of
employment after attaining "Early Retirement Age" as defined in
the Supplemental Retirement Plan.
(f) "Incentive Award" means the annual award received by a participant
under the Company's Incentive Compensation Plan, and/or the
Company's Strategic Goals Incentive Compensation Program.
(g) "Supplemental Salary Reduction Agreement" means an agreement
entered into by a participant and the Company in December of a
Fiscal year under which the participant irrevocably agrees to
forego up to 15% of compensation that would otherwise be paid to
the participant during the next Fiscal Year less amounts allowable
to be contributed on behalf of the participant pursuant to
Subsection 3.2(b) of the Supplemental Retirement Plan.
2.2 Gender and Number. Except when otherwise indicated by the context,
any masculine terminology used herein shall also include the feminine, and the
use of any term herein in the singular may also include the plural.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 Eligibility. Any employee of the Company who is a participant in
the Minnesota Power and Affiliated Companies Supplemental Retirement Plan, in
the Minnesota Power and Affiliated Companies Incentive Compensation Plan, in the
Minnesota Power and Affiliated Companies Retirement Plan A, in the Minnesota
Power and Affiliated Companies Flexible Compensation Plan for Nonunion Employees
and in
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the Minnesota Power and Affiliated Companies Employee Stock Ownership Plan shall
be eligible to participate In this Plan beginning with the first calendar year
in which such employee becomes eligible to receive Incentive Awards under the
Minnesota Power and Affiliated Companies Incentive Compensation Plan.
3.2 Participation. Each employee who meets the requirements of
Subsection 3.1 shall become a participant on the day upon which the employee
receives an Incentive Award under the Minnesota Power and Affiliated Companies
Incentive Compensation Plan.
An employee who becomes a participant shall remain eligible to have an account
in the Plan as a participant hereunder, without regard to Compensation and/or
Incentive Awards received in subsequent years, until the first to occur of (i)
the employee's Retirement, or (ii) the date upon which the employee's employment
terminates for any reason.
An employee who was a participant, but is not currently eligible for benefits
will not receive account additions described in Section 4.
SECTION 4. BENEFITS
4.1 Amount of Deferred Compensation.
(a) For each calendar year ending on or after December 31, 1980,
and except as hereinafter specifically provided in this
Section 4, the Company shall credit each participant who
qualifies:
(1) An amount, if greater than zero, equal to seven
percent of Compensation (excluding imputed income
reported on Treasury Form W-2) in excess of Social
Security Wage Base for such year less the total of
(i) the Employee Stock Ownership Plan's Partnership
allocation percent of such plan year, and (ii) three
percent of the participant's Pay plus Incentive Award
for such year (provided, however, that this section
4.1(a) (1) shall only apply to
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those employees who are in Management Salary Grade
IV and above before July 1, 1980.
(2) An amount equal to three percent of (i) the total of
the participant's Incentive Award for such year, plus
(ii) the amount of the participant's annual salary
for the prior year that has been deferred pursuant to
the terms of the Minnesota Power and Affiliated
Companies Executive Investment Plan I and the
Minnesota Power and Affiliated Companies Executive
Investment Plan II, plus any amount of the
participant's annual salary not included in
calculating benefits under the Company's Flexible
Compensation Program for nonunion employees for such
year due to limitations under Code Section 404(I).
(3) An amount equal to a percentage of the total of the
participant's Incentive Award for such year plus the
amount of the participant's annual salary for the
prior year that has been deferred pursuant to the
terms of the Minnesota Power and Affiliated Companies
Executive Investment Plan I and the Minnesota Power
and Affiliated Companies Executive Investment Plan
II, plus any amount of the participant's annual
salary not included in calculating benefits under the
Company's Flexible Compensation Program for nonunion
employees for such year due to limitations under Code
Section 404(I), such percentage to equal the
percentage attributable to the participant under the
Company's Flexible Compensation Program for nonunion
employees for such year for life insurance coverage.
(4) An amount equal to the greater of:
(a) two percent, or
(b) the applicable percent being contributed under
Subsection 4.1(g) of the Company's Employee Stock
Ownership Plan of the following:
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(i) the total of the participant's
Incentive Award for such year, plus
(ii) the amount of the participant's annual salary
for the prior year that has been deferred
pursuant to the terms of the Minnesota Power
and Affiliated Companies Executive Investment
Plan I and II, plus any amount of the
participant's annual salary not included in
calculating benefits under the Company's
Flexible Compensation Program for nonunion
employees for such year due to limitations
under Code Section 404(I).
(5) An amount, if greater than zero, equal to (i) minus
(ii) provided the actual Company contribution for the
participant to the Supplemental Retirement Plan and the
Employee Stock Ownership Plan for the calendar year is the
maximum amount permitted under Section 415 of the Internal
Revenue Code.
(i) The maximum Company contribution that could
be made to the Supplemental Retirement Plan and the
Employee Stock Ownership Plan for the calendar year if
the limitations on annual additions under Section 415
of the Internal Revenue Code did not exist.
(ii) The actual Company contribution made to the
Supplemental Retirement Plan and the Employee Stock
Ownership Plan for the calendar year.
(b) An amount, equal to the amount for which a participant has
elected to reduce his or her annual salary pursuant to a
Supplemental Salary Reduction Agreement for the prior year, not to
exceed 15% of the participant's annual salary less the amount
allowable to be deferred under the Supplemental Retirement Plan.
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(c) At the Retirement of a participant, the Company shall credit each
participant who qualifies under Subsection 3.2 with deferred
compensation equal to the present worth, actuarially determined,
of (1) minus (2) provided the difference is greater than zero.
(1) The monthly retirement benefit that would be provided by
Retirement Plan A if (i) the largest sum of four Incentive
Awards plus Results Sharing (if any) during any consecutive
48-month period in the most recent 15-year period had been
added to the total of the Final Average Earning computation
in Subsection 2.1(g) of Retirement Plan A (calculated by not
including Results Sharing Awards) (the periods covering
Final Average Earnings and the four consecutive Incentive
Awards plus Results Sharing need not cover the same 48-month
period, but Incentive Awards and Results Sharing Awards must
have been awarded during the same year), plus any deferral
of annual salary (during the period for which Final Average
Earnings are computed) pursuant to the Minnesota Power and
Affiliated Companies Executive Investment Plan I and the
Minnesota Power and Affiliated Companies Executive
Investment Plan II, plus any annual salary not included in
calculating benefits under Retirement Plan A due to
limitation under code Section 404(I), and (ii) the
limitation on annual benefits contained in Section 415 of
the Internal Revenue Code did not exist.
(2) The actual monthly retirement benefit provided by Retirement
Plan A.
In determining present worth, both the dollar limitation under
Section 415 of the Internal Revenue Code and the Consumer Price
Index used to calculate the cost-of-living adjustments under
Subsection 4.8 of Retirement Plan A, shall be assumed to increase
after the participant's Retirement at the same average annual rate
as the increase in the Consumer Price Index for the five year
period ending on the later of the June 30th or the December 31st
immediately preceding Retirement. The
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present worth calculation also shall be subject to the
continuation of a portion of the retirement benefit to the
surviving spouse following the death of the retired participant in
a manner similar to Subsection 4.1(c) or 4.2(c) of Retirement Plan
A. The interest rate to be used in determining present worth shall
be an annual percentage rate of 8%.
(d) At the death of a participant who has attained age 50 and 10 years
of service, and who qualifies under Subsection 3.2 and for whom a
survivor income benefit is payable under Subsection 4.10 of
Retirement Plan A, the Company shall credit the participant with
deferred compensation equal to the present worth, actuarially
determined, of (1) minus (2) provided the difference is greater
than zero.
(1) The monthly survivor income benefit that would be provided
under Subsection 4.10(b) (2) of Retirement Plan A if any
amount of base salary deferred pursuant to the Company's
Executive Investment Plans I and II had been included in
calculating the participant's "monthly rate of compensation
from the Employer."
(2) The actual monthly survivor income benefit provided under
Subsection 4.10(b)(2) of Retirement Plan A.
In determining present worth under (c) above, the Consumer Price
Index used to calculate the cost-of-living adjustments under
Subsection 4.8 of Retirement Plan A shall be assumed to increase
after the participant's death at the same average annual rate as
the increase in the Consumer Price Index for the five year period
ending on the later of the June 30th or the December 31st
immediately preceding death. The interest rate to be used in
determining present worth shall be an annual percentage rate used
for purposes of calculating funding necessary for Retirement Plan
A. The probability of remarriage by the surviving spouse shall be
taken into account in determining present worth.
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4.2 Allocation of Deferred Compensation. The deferred compensation
amounts specified in the preceding subsection shall be allocated
to the account of a participant at the end of the Plan year only
if one of the following conditions is satisfied:
(a) The participant is in the employment of the Company on the last
day of the calendar year;
(b) The participant died while employed by the Company during such
calendar year;
(c) The participant Retired during such calendar year;
(d) The participant terminates his or her employment on account of
disability (as defined in the Supplemental Retirement Plan) during
such calendar year; or
(e) The participant was on leave of absence at the close of such
calendar year and received Compensation from the Company during
such year.
4.3 Elections for Payment Options.
(a) Subject to the provisions of Subsections 4.6, 4.7, 4.8 and 4.9
hereof, each participant shall have the right to elect to have all
or any portion of the benefit amounts allocated to said
participant under Subsection 4.2 for a calendar year paid under
one of the following options:
(1) In cash (either partially or totally);
(2) deferred to a date specified by the participant (at which
time such benefit amounts shall be paid in cash), with the
latest deferral date to be the earlier of (i) the first
April 1st to occur after the participant attains age 70 1/2
or (ii) such date selected by the participant up to five
years after the date of the participant's Retirement; or
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(3) deferred to the earlier to occur of the following events:
(i) The Retirement of the participant or, if elected, up
to five years after Retirement but in no event later
than the first April 1st to occur after the
participant attains age 70 1/2 (in which case the
participant may also elect to receive the
participant's benefit amount in equal monthly
installments commencing on the first day of the month
following the date of the participant's Retirement) or
the first day of the month after such later date as is
elected by the participant as hereinabove provided in
this Subsection 4.3(a) (3) (i), and continuing
thereafter for a period of fifteen (15), ten (10) or
five (5) years, as is elected by the participant.
(ii) the death of the participant.
(iii) the disability of the participant.
(iv) the termination of the participant's employment other
than at Retirement.
Elections under this Subsection 4.3 must be made in writing
to the committee prior to the end of the calendar year
preceding the year in which benefits are allocated under
Subsection 4.2. Such election shall be irrevocable.
(b) Within a reasonable time after the end of each calendar year, but
after the participant's allocation for such year has been
determined, the Company shall pay to the electing participant, by
check, the amount of the participant's allocation which the
participant has elected to take in cash for the preceding calendar
year.
(c) If an election is not in effect on the first day of a calendar
year, that portion of the participant's deferred compensation
amount for such calendar year shall be irrevocably entered on the
books of the Company as an account
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in the name of the participant to be deferred, adjusted, and paid
in accordance with the provisions of Section 4.4.
(d) If payments to a participant are to be made in installments, then
the Committee shall calculate the size of each monthly installment
under procedures consistent with those used under the Company's
Executive Investment Plan I and Executive Investment Plan II. If
payments to a participant are to be made in installments, then the
supplemental account of the participant shall continue to be
adjusted as of the last day of each calendar year as provided in
paragraph (a) of Subsection 4.5.
4.4 Normal Form of Payment of Benefits.
(a) Unless a participant elects otherwise in accordance with
Subsection 4.3, the Company shall pay each participant the balance
credited to the participant's supplemental account in a single sum
during the calendar year following the year in which the
participant Retires, dies, becomes disabled or terminates
employment. Payment shall be made within 30 days after the
calculation of amounts deferred under this plan is actually made
for the year. Amounts paid shall be reduced by any amounts
required to be withheld by state or federal law.
4.5 Maintenance of Accounts.
(a) The Company shall establish and maintain, in the name of each
participant, an individual account, to be known as the
supplemental account, which shall be credited each year with
earnings or losses on the balance outstanding as of the end of the
preceding year and with the amount of the annual allocation which
the participant does not elect to receive in cash.
For each calendar year the Committee shall adjust the balance, if
any, of the participant's supplemental account as of the last day
of the preceding calendar year ("Accounting Date"), by multiplying
such amount (including any deferred compensation amounts credited
as of such date on account
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of the preceding year) by one of the multipliers approved by the
Employee Benefits Committee, with participant to choose a
multiplier or multipliers annually in advance to be effective for
the succeeding year.
If the participant has made an election to transfer supplemental
account balances among the aforementioned multipliers during the
calendar year, such applicable multipliers shall be prorated to
reflect that portion of the year that the supplemental account
balances were invested in each investment fund. The participant
may elect to transfer supplemental account balances among the
aforementioned investment fund multipliers effective for any
month. The aforementioned investment fund multipliers shall be
used only as a performance reference for the participant's
supplemental account, and such supplemental account need not be
invested in such investment funds by the Committee.
The Committee shall then add to such supplemental account balance,
as adjusted for earnings or losses during the year. the allocation
of deferred compensation amounts, If any, that the participant has
not elected to receive in cash for the calendar year.
(b) The supplemental account of each participant shall be entered on
the books of the Company and shall represent a liability, payable
when due under this Plan, out of the general assets of the
Company. Prior to benefits becoming due hereunder, the Company
shall expense the liability for payment of such accounts in
accordance with policies determined appropriate by the Company's
auditors.
(c) In years when deferred compensation elections are made available
under the Company's Executive Investment Plans I and II, each
participant shall be entitled to transfer his or her individual
account as a Rollover Amount to the Minnesota Power and Affiliated
Companies Executive Investment Plan I or the Minnesota Power and
Affiliated Companies Executive Investment Plan II, all subject to
the specific terms and restrictions in said Plans, provided that
the transfer of an individual account as a Rollover
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Amount shall not result in a deferral or acceleration of the date
or dates on which such Rollover Amount would have been received
under the terms of this Plan had no transfer occurred.
4.6 Payment of Amount Credited Under Section 4.1(c) Notwithstanding
the provisions of Section 4.3, the amount credited to a participant upon
Retirement under Section 4.1(c) shall be paid in equal monthly installments
commencing on the last day of the month following the date of the Participant's
Retirement and continuing for a period of 15 years. Monthly installments shall
be calculated in accordance with the provisions of Section 4.3.
4.7 Payment of Unpaid Benefits Upon Participant's Death. If a
participant dies while employed by the Company or if a Retired participant dies
before receiving all payments which such participant is entitled to receive
pursuant to Subsections 4.4, 4.6 or pursuant to an election made under
Subsection 4.3 hereof, the amount then standing to the credit of such
participant on his or her supplemental account shall be paid in the subsequent
calendar year following the date of the participant's death to the participant's
beneficiary. A subsequent payment shall be made in a single sum within 30 days
after allocation of amounts payable under this plan is actually made for the
year in which the participant's date of death occurs.
Each participant may designate, by letter to the Committee, a beneficiary to
receive any payment to be made hereunder after the death of the participant. The
designation shall take effect upon receipt of the letter by the Committee. A
participant may change his or her designated beneficiary or beneficiaries from
time to time and each such letter of designation shall revoke any previous
designation. If no beneficiary has been designated, or if all designated
beneficiaries have predeceased the participant, the deceased participant's
estate shall be the participant's beneficiary. If a designated beneficiary shall
survive the participant but all designated beneficiaries shall die prior to
complete distribution of the benefit payable with respect to the participant,
the deceased participant's beneficiary shall be the estate of the last surviving
designated beneficiary.
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4.8 Distribution Upon Termination Other Than Retirement, Death or
Disability. If a participant's employment with the Company terminates for any
reason other than Retirement, death or disability, the balance to the credit of
the participant's supplemental account as of the Accounting Date immediately
preceding or coincident with the date of the participant's termination of
employment, shall be paid to the participant in a single sum upon the date of
the participant's separation from service, or within 30 days thereafter. If a
participant entitled to a benefit under this section dies prior to receiving
payment, then such payment shall be made to the participant's beneficiary.
4.9 Distribution Upon Disability. In the event a participant
terminates his or her employment on account of disability (as defined in the
Supplemental Retirement Plan) prior to Retirement, the balance to the credit of
the participant's supplemental account shall be paid to the participant in a
single sum in the year after such termination of employment occurs. Payments
shall be made within 30 days after the calculation of amounts payable under this
plan is actually made for the year in which the participant separated from
service on account of disability. If a participant entitled to a benefit under
this section dies prior to receiving payment, then such payment shall be made to
his or her beneficiary.
SECTION 5. ADMINISTRATION
5.1 Committee. This Plan shall be administered by the committee
appointed by the Board of Directors of the Company and known as the Employees'
Benefit Plans Committee (the "Committee").
The interpretation and construction by the Committee of any provisions of the
Plan shall be final unless otherwise determined by the Board of Directors.
Subject to the Board, the Committee is authorized to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, and to make
all other determinations necessary for its administration.
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Without limiting the generality of the foregoing, the Committee shall have the
authority to calculate amounts allocable to participants, to maintain and adjust
supplemental accounts, and to calculate the percentage net return on account
balances.
5.2 Uniform Rules. In administering the Plan, the Committee will apply
uniform rules to all participants similarly situated.
5.3 Notice of Address. Any payment to a participant or beneficiary, at
the last known post office address on file with the Company, shall constitute a
complete acquittance and discharge to the Company and any director or officer
with respect thereto unless the Company shall have received prior written notice
of any change in the address, condition, or status of the distributee. Neither
the Company nor any director or officer shall have any duty or obligation to
search for or ascertain the whereabouts of any participant or his beneficiary.
5.4 Records. The records of the Committee with respect to the Plan
shall be conclusive on all participants. all beneficiaries, and all other
persons whomsoever.
5.5 Claims Procedure. If any claim for benefits under the Plan is
wholly or partially denied, the claimant shall be given notice in writing,
within a reasonable period of time after receipt of the claim by the plan, by
registered or certified mail, of such denial, written in a manner calculated to
be understood by the claimant, setting forth the specific reasons for such
denial, specific reference to pertinent Plan provisions on which the denial is
based, a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary, and an explanation of the Plan's claim review
procedure. The Claimant also shall be advised that he or his duly authorized
representative may request a review by the Committee of the decision denying the
claim by filing with the Committee, within 60 days after such notice has been
received by the claimant, a written request for such review, and that the
Claimant may review pertinent documents, and submit issues and comments in
writing within the same 60-day period. If such request is so filed, such review
shall be made by the Committee within 60 days after receipt of such request; and
the claimant shall be given written notice of the decision resulting from such
review, and shall include specific reasons for the decision, written in
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a manner calculated to be understood by the claimant, and specific references
to the pertinent Plan provisions on which the decision is based.
5.6 Change of Law. The Committee may make payments of any benefits or
deferred amounts to be paid under the Plan, to any participant or participants,
or to the beneficiary of any participant or participants, in advance of the date
when otherwise due, (i) if, based on a change in federal tax law or regulation,
published rulings or similar announcements by the Internal Revenue Service,
decision by a court of competent jurisdiction involving the Plan, a participant
or a beneficiary, or a closing agreement made under Section 7121 of the Internal
Revenue Code of 1986 that involves the Plan, a participant or a beneficiary, it
determines that a participant or beneficiary will recognize income for federal
income tax purposes with respect to amounts that are otherwise not then payable
under the Plan; or (ii) if it shall be determined that the Plan is subject to
the requirements of Parts 2 and 3 of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974, because such Plan is not maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees.
5.7 Generation-Skipping Tax. Notwithstanding any provisions in this
Plan to the contrary, the Committee may withhold any benefits payable to a
beneficiary as a result of the death of the participant (or the death of any
beneficiary designated by the participant) until such time as (i) the Committee
is able to determine whether a generation-skipping transfer tax, as defined in
Chapter 13 of the Internal Revenue Code of 1986, or any substitute provision
therefor, is payable by the Company; and (ii) the Committee has determined the
amount of generation-skipping transfer tax that is due, including interest
thereon. If any such tax is payable, the Committee shall reduce the benefits
otherwise payable hereunder to such beneficiary by the amount necessary to
provide said beneficiary with a benefit equal to the amounts that would have
been payable if the original benefits had been calculated on the basis of a
value for the participant's supplemental account reduced by an amount equal to
the generation-skipping transfer tax and any interest thereon that is payable as
a result of the death in question. The Committee may also withhold from
distribution by further reduction of the then net value of benefits calculated
in accordance with the terms of the previous sentence such amounts as the
Committee feels are reasonably necessary to pay
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additional generation-skipping transfer tax and interest thereon from amounts
initially calculated to be due. Any amounts so withheld, and not actually paid
as a generation-skipping transfer tax or interest thereon, shall be payable as
soon as there is a final determination of the applicable generation-skipping
tax and interest thereon.
SECTION 6. GENERAL PROVISIONS
6.1 Nonassignability. Benefits under the Plan are not in any way
subject to the debts of other obligations of the persons entitled thereto and
may not voluntarily or involuntarily be sold, transferred, or assigned.
6.2 Incompetency. Every person receiving or claiming benefits under
the Plan shall be conclusively presumed to be mentally competent and of age
until the Committee receives written notice, in a form and manner acceptable to
it, that such person is incompetent or a minor, and that a guardian,
conservator, statutory committee, or other person legally vested with the care
of his or her estate has been appointed. In the event that the Committee finds
that any person to whom a benefit Is payable under the PIan is unable to
properly care for his or her affairs, or is a minor, then any payment due
(unless a prior claim therefor shall have been made by a duly appointed legal
representative) may be paid to the spouse, a child, a parent, or a brother or
sister, or to any person deemed by the Committee to have incurred expense for
such person otherwise entitled to payment.
In the event a guardian or conservator or statutory committee of the estate of
any person receiving or claiming benefits under the Plan shall be appointed by a
court of competent jurisdiction, payment shall be made to either guardian or
conservator or statutory committee provided that proper proof of appointment is
furnished in a form and manner suitable to the Committee. Any payment made under
the provisions of this subsection shall be complete discharge of liability
therefor under the Plan.
6.3 Employment Rights. The establishment of the Plan shall not be
construed as conferring any legal rights upon any participant or any other
person for a continuation of employment, nor shall it interfere with the rights
of the Company to discharge any person and/or treat such person without regard
to the effect which such treatment might have upon or her as a person covered by
this Plan.
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6.4 No Individual Liability. It is declared to be the express purpose
and intention of the Plan that no liability whatever shall attach to or be
incurred by the shareholders, officers, or directors of the Company, or any
representatives appointed hereunder by the Company, under or by reason of any of
the terms or conditions of the Plan.
6.5 Illegality of Particular Provision. If any particular provision of
the Plan shall be found to be illegal or unenforceable, such provision shall not
affect the other provisions thereof, but the Plan shall be construed in all
respects as if such invalid provision were omitted.
6.6 Contractual Obligations. It is Intended that the Company is under
a contractual obligation to make payments to participants from the general funds
and assets of the Company in accordance with the terms and conditions of the
Plan, with such payments to reduce the amounts allocated to the participant's
account hereunder. A participant shall have no rights to such payments. other
than as a general, unsecured creditor of the Company.
SECTION 7. AMENDMENT AND TERMINATION
7.1 Amendment and Termination. The Company expects the Plan to be
permanent, but since future conditions affecting the Company cannot be
anticipated or foreseen, the Company must necessarily and does hereby reserve
the fight to amend, modify, or terminate the Plan at any time by written
resolution of its Board of Directors. Provided, however, no amendment,
termination or other change in the Plan shall reduce the amount allocated to the
account of a participant on the date of such amendment, termination or other
change, which account balance shall be payable to such participant or such
participant's beneficiary as provided herein.
7.2 Reorganization of the Company. In the event of a merger or
consolidation of the Company, or the transfer of substantially all of the assets
of the Company to another corporation, such continuing, resulting or transferee
corporation shall have the right to continue and carry on the Plan and to assume
all liabilities of the
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Company hereunder without obtaining the consent of any participant or
beneficiary. If such successor shall assume the liabilities of the Company
hereunder, then the Company shall be relieved of all such liability, and no
participant or beneficiary shall have the right to assert any claim against the
Company for benefits under or in connection with this Plan.
SECTION 8. APPLICABLE LAWS
8.1 Applicable Laws. The Plan shall be governed by and construed
according to the laws of the State of Minnesota.
IN WITNESS WHEREOF, Minnesota Power & Light Company, has caused this
instrument to be executed by its duly authorized officers and its corporate seal
to be hereunto affixed.
MINNESOTA POWER & LIGHT COMPANY
By R.D. Edwards
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Its Executive Vice President
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ATTEST:
By Philip R. Halverson
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Its Secretary
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