Exhibit 10.9
TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
FOR TIMOTHY L. GUZZLE
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide Timothy L. Guzzle, Chairman of
the Board and Chief Executive Officer of TECO Energy, with additional
retirement income by supplementing the retirement benefits provided under the
retirement plan. The plan was originally effective as of February 22, 1988.
The effective date of this amendment and restatement is October 16, 1996.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the singular includes the plural, and the plural includes
the singular.
2.1 Annual earnings will have the same meaning as in the retirement
plan, except that the same will be determined without regard to (a) any dollar
limitation on such annual earnings that may be imposed under the retirement
plan or (b) any reduction in taxable income as a result of voluntary salary
reduction deferrals under the TECO Energy Group Retirement Savings Excess
Benefit Plan.
2.2 Average annual earnings of Mr. Guzzle as of any date of reference
means the average of his annual earnings during whichever of the following
periods yields the highest average: (a) the 36 consecutive months of active
employment preceding the date of reference (or all months of employment if
less than 36), or (b) any three consecutive calendar years out of the five
calendar years preceding the date of reference. Bonuses are included as
compensation for the period in which paid, provided that if more than three
regular annual bonuses are paid in any 36 consecutive month period, only the
largest three bonuses will be counted.
2.3 Board means the Board of Directors of TECO Energy.
2.4 Committee means the retirement plan committee as constituted under
the retirement plan.
2.5 TECO Energy means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of TECO
Energy, Inc. under this plan.
2.6 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
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Exhibit 10.9
2.7 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan for T.L. Guzzle, as set forth in this plan instrument, and as it may be
amended from time to time.
2.8 Retirement means termination of Mr. Guzzle's employment with TECO
Energy by Mr. Guzzle or TECO Energy for any reason.
2.9 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.10 Service will have the same meaning as "plan service" in the
retirement plan.
2.11 Social security benefit of Mr. Guzzle as of any date of reference
(the "computation date") means the primary insurance amount to which he is or
would be entitled, payable under Title II of the Social Security Act as in
effect on such date, based on the assumptions: (a) that no changes in the
benefit levels payable or the wage base under Title II occur after the
computation date; (b) that, if the computation date falls before his 62nd
birthday, his annual earnings during the calendar year in which the
computation date falls and during any subsequent calendar year before the
calendar year in which his 62nd birthday falls is zero; (c) that payment of
his primary insurance amount begins for the month after he reaches age 62, or
his date of retirement if later, without reduction or delay because of future
gainful employment or delay in applying for benefits; and (d) that his
earnings for calendar years before the calendar year in which the computation
date falls will be determined using his actual earnings history if available,
and otherwise by applying a six percent retrospective salary scale to his rate
of annual earnings in effect on the computation date. The social security
benefit of Mr. Guzzle if he retires after his 65th birthday will include any
delayed retirement credit.
2.12 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. RETIREMENT BENEFITS
3.1 Retirement at or after age 62. Subject to the reductions in
Section 6.1 below, if Mr. Guzzle retires on or after attaining age 62, he will
receive a supplemental monthly retirement benefit equal to one-twelfth of 60
percent of his average annual earnings (60 percent is equal to six percent
multiplied by a maximum of 10 years of service). Mr. Guzzle's retirement
benefit hereunder will be calculated using his average annual earnings as of
his actual date of retirement.
3.2 Retirement before age 62. Subject to the reductions in Section
6.1 below, if Mr. Guzzle retires before attaining age 62, he will receive a
supplemental monthly retirement benefit equal to one-twelfth of (a) six
percent of his average annual earnings multiplied by his years of service (or
portions thereof) determined as of his date of retirement, multiplied by (b)
an early retirement factor determined under the following table:
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Exhibit 10.9
Years by which the
start of payments Early retirement
precedes age 62* factor
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
* Interpolate for completed months
3.3 Termination by TECO Energy without Cause or by Mr. Guzzle for Good
Reason. If Mr. Guzzle's employment is terminated by TECO Energy other than
for Cause or disability or by the participant for Good Reason, retirement
benefits payable under Section 3.2 will be computed as though Mr. Guzzle had
continued to be employed at the same rate of annual earnings by TECO Energy
(after the date of termination) for 24 months or, if less, the number of
months from the date of termination until age 62. "Cause" and "Good Reason"
are defined in the employment agreement between TECO Energy and the
participant dated July 20, 1993, as it may be amended from time to time.
3.4 Form of Payment.
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to Mr. Guzzle under the plan is a life annuity.
Benefits payable in the normal form will begin on the first day of the month
coinciding with or next following the date of Mr. Guzzle s retirement.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, Mr. Guzzle may elect to receive payment of his benefit in the form of
a commuted single sum payment that is the actuarial equivalent of the normal
form of benefit (including the value of the post-retirement surviving spouse
benefit under Section 4.2(c)). If Mr. Guzzle elects to receive a lump sum
payment, such payment will be made on the first day of the month coinciding
with or next following the date Mr. Guzzle's employment terminates. Actuarial
equivalence will be based on the actuarial assumptions specified from time to
time in the retirement plan for lump sum payments. Mr. Guzzle's election to
receive a lump sum payment will be effective only with respect to a retirement
occurring at least 12 months after the date Mr. Guzzle submits the election,
provided that elections submitted on or before December 31, 1996 will be
immediately effective.
SECTION 4. SURVIVING SPOUSE BENEFIT
4.1 Eligibility. Mr. Guzzle's surviving spouse will receive the
surviving spouse benefit if Mr. Guzzle and his spouse were married to each
other for at least the 12 months preceding Mr. Guzzle's date of death and, in
the case of Mr. Guzzle's death after retirement, Mr. Guzzle and his spouse
were married to each other on Mr. Guzzle's date of retirement.
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Exhibit 10.9
4.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 6.2 below, the benefit provided under the plan to Mr.
Guzzle's surviving spouse will be determined as follows:
(a) Pre-retirement before age 62. If Mr. Guzzle dies during
employment with TECO Energy and before his 62nd birthday, his surviving spouse
will receive a monthly survivor income payment equal to 50 percent of his
monthly projected retirement benefit. Mr. Guzzle's monthly projected
retirement benefit is the monthly benefit he would have received if he had
retired at age 62 under Section 3.1 calculated using his average annual
earnings determined as of his date of death.
(b) Pre-retirement on or after age 62. If Mr. Guzzle dies
during employment with TECO Energy on or after his 62nd birthday, his
surviving spouse will receive a monthly survivor income payment equal to 50
percent of his monthly retirement benefit earned under Section 3.1 using his
average annual earnings as of his date of death.
(c) Post-retirement. If Mr. Guzzle dies on or after the date of
his retirement, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of the monthly benefit payment he was receiving at
his death (or would have received if he had survived until the first payment
date).
4.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 4 will be payable only in the form of a life
annuity to the surviving spouse. Benefit payments will begin on the first day
of the month coinciding with or next following the date of Mr. Guzzle's death.
4.4 Death benefit where lump sum paid. If Mr. Guzzle received a lump
sum payment of his benefit under Section 3.4(b), no surviving spouse benefit
or other death benefit will be payable under the plan to any person.
SECTION 5. DISABILITY
5.1 If Mr. Guzzle suffers a total disability (as defined in the
disability income plan) before age 62, he will continue to be credited with
service as if he were actively employed by TECO Energy during his period of
total disability. Mr. Guzzle may not receive benefits under this plan at any
time when he is receiving disability income payments under the disability
income plan. Benefits under this plan will begin when payments cease under
the disability income plan.
5.2 Mr. Guzzle's disability date is his last day of work for TECO
Energy before becoming unable to continue working because of his total
disability. A period of total disability of Mr. Guzzle will begin on his
disability date and will end on the earlier of the last day of the month in
which his final disability income payment is due under the disability income
plan or on the date he retires hereunder and starts receiving benefit
payments.
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Exhibit 10.9
5.3 If Mr. Guzzle does not return to active service with TECO Energy
after suffering a total disability, his retirement benefits under Section 3
will be calculated using his average annual earnings as of his disability
date, his total service including service credited under Section 5.1 above,
and his primary social security benefit as of his date of disability.
5.4 If Mr. Guzzle dies while disabled, his surviving spouse will, if
eligible, receive the pre-retirement surviving spouse benefit determined under
Section 4.2(a) or (b).
SECTION 6. OFFSET FOR OTHER PAYMENTS
6.1 Mr. Guzzle's retirement benefit will be reduced (but not below
zero) by the following payments, with such reductions starting when such
payments are assumed to begin: (a) 100 percent of the social security benefit
of Mr. Guzzle assuming such benefit begins on the later of the date he reaches
age 62 or his actual retirement, and (b) the amount of his benefit payments
under the retirement plan (converted to a life annuity if such payments are in
an optional form), assuming such payments begin on his actual retirement date.
6.2 The benefit of Mr. Guzzle's surviving spouse will be reduced (but
not below zero) by the following payments: (a) payments under the survivor
income plan, and (b) payments under the retirement plan.
SECTION 7. BENEFITS NOT CURRENTLY FUNDED
7.1 Nothing in this plan will be construed to create a trust or to
obligate TECO Energy or any other employer to segregate a fund, purchase an
insurance contract, or in any other way currently to fund the future payment
of any benefits hereunder, nor will anything herein be construed to give Mr.
Guzzle or any other person rights to any specific assets of TECO Energy or of
any other employer or entity.
7.2 Notwithstanding Section 7.1, TECO Energy has established a grantor
trust of which it is treated as the owner under Section 671 of the Internal
Revenue Code to provide for the payment of benefits hereunder.
SECTION 8. ADMINISTRATION
The plan will be administered by the committee, which will have full
power and authority to construe, interpret and administer the plan. Decisions
of the committee will be final and binding on all persons. The committee may,
in its discretion, adopt, amend and rescind rules and regulations relating to
the administration of the plan.
SECTION 9. RIGHTS NON-ASSIGNABLE
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Exhibit 10.9
Neither Mr. Guzzle, his surviving spouse, nor any other person will have
any right to assign or otherwise to alienate the right to receive payments
under the plan, in whole or in part.
SECTION 10. OTHER BENEFIT PLANS
This plan will supersede any obligation to pay benefits to Mr. Guzzle
under the excess benefit plan contained in the retirement plan or the TECO
Energy Group Supplemental Executive Retirement Plan, as they may be amended
from time to time. No benefits will be payable to Mr. Guzzle under such
excess benefit plan or the TECO Energy Group Supplemental Executive Retirement
Plan.
SECTION 11. AMENDMENT
TECO Energy reserves the right at any time by action of the board to
amend the plan in any way. However, no amendment of the plan may reduce the
benefits to be paid to Mr. Guzzle or his surviving spouse below those that
would have been paid if the plan had continued without change to the date of
Mr. Guzzle's retirement or termination of employment for any reason.
Executed as of October 16, 1996.
TECO ENERGY, INC.
By:
Roger A. Dunn
V i ce President - Human Resources
TIMOTHY L. GUZZLE
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