TECO ENERGY GROUP
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
1996 Amendment and Restatement
SECTION 1. PURPOSE AND EFFECTIVE DATE
The purpose of this plan is to provide key executives of the Company and
its subsidiaries with additional retirement income by supplementing the
retirement benefits provided under the retirement plan. The effective date of
this plan as herein amended and restated is October 16, 1996.
SECTION 2. DEFINITIONS
This section contains definitions of terms used in the plan. Where the
context so requires, the masculine includes the feminine, 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 a participant as of his retirement date
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 retirement date (or all months of employment if less
than 36), or (b) any three consecutive calendar years out of the five calendar
years preceding the retirement date. 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 shall mean the Board of Directors of the Company.
2.4 Change in control of the company shall mean a change in control of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), whether or not the Company is in
fact required to comply therewith; provided, that, without limitation, such a
change in control shall be deemed to have occurred if:
(a) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of
the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities;
(b) during any period of 24 consecutive months (not including
any period prior to the effective date of this plan), individuals who at the
beginning of such period constitute the board and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in paragraphs (a), (c) or (d) of
this Subsection 2.4) whose election by the board or nomination for election by
the stockholders of the company was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (i) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) at least 50% of the combined voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no "person"
(as hereinabove defined) acquires 30% or more of the combined voting power of
the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
2.5 Committee means the retirement plan committee as constituted under
the retirement plan.
2.6 Company means TECO Energy, Inc. and any successor to all or a
major portion of its assets or business which assumes the obligations of the
Company under this plan.
2.7 Disability income plan means the TECO Energy Group Disability
Income Plan, as amended from time to time.
2.8 Early retirement age is exactly ten years before the age specified
in the table in Section 2.10.
2.9 Employer will have the same meaning as in the retirement plan.
2.10 Normal retirement age for purposes of this plan is exactly three
years before the age specified in the following table:
Calendar year
of birth Specified age
before 1938 65 exactly
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943 through 1954 66 exactly
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
after 1959 67 exactly
2.11 Participant means each employee of an employer who has satisfied
the eligibility requirements set forth in Section 3 hereof.
2.12 Plan means the TECO Energy Group Supplemental Executive Retirement
Plan, as set forth in this plan instrument, and as it may be amended from time
to time.
2.13 Retirement means a participant's termination of employment from an
employer on or after (a) he has reached his normal retirement age, (b) he has
reached his early retirement age and completed five years of service, or (c) a
change in control of the Company has occurred.
2.14 Retirement plan means the TECO Energy Group Retirement Plan, as
amended from time to time.
2.15 Service will have the same meaning as "plan service" in the
retirement plan.
2.16 Social Security benefit of a participant as of his retirement date
(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) if the computation date falls on or after the date when
he reaches his early retirement age and before the date when he reaches his
normal retirement age, that his annual earnings during the calendar year in
which the computation date falls and any subsequent calendar year before the
year in which his normal retirement age falls is zero; (c) if the computation
date falls before the date when he reaches his early retirement age, that his
annual earnings during the calendar year in which the computation date falls
and during each subsequent calendar year before the calendar year in which his
normal retirement age falls is equal to his rate of annual earnings on the
computation date; (d) that payment of his primary insurance amount begins for
the month after he reaches normal retirement age, or his retirement date if
later, without reduction or delay because of future gainful employment or
delay in applying for benefits; and (e) that the participant's 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 the
employee's rate of annual earnings in effect on the computation date. The
social security benefit of a participant who retires after the age specified
in the table in Section 2.10 will include any delayed retirement credit.
2.17 Survivor income plan means the TECO Energy Group Survivor Income
Plan, as amended from time to time.
SECTION 3. PARTICIPATION
Any active employee of an employer who is elected as an officer by such
employer's board of directors is covered by this plan and is eligible to
receive benefits hereunder if he falls in one of the following categories,
provided that he is not covered by another supplemental executive retirement
plan or arrangement of the Company or any employer:
(a) he is in salary grade level five or above, and his participation
hereunder is requested by the Vice President - Human Resources and approved by
the Chief Executive Officer of the Company; or
(b) he is in a salary grade level below five, and his participation
hereunder is requested by the Vice President - Human Resources and approved by
the Chief Executive Officer of the Company and the Compensation Committee of
the Board.
SECTION 4. RETIREMENT BENEFITS
4.1 Retirement at or after normal retirement age. Subject to the
reductions described in Section 7.1 below, each eligible officer who retires
on or after attaining normal retirement age will receive a supplemental
monthly pension equal to one-twelfth of the following: three percent of his
average annual earnings multiplied by his years of service up to a maximum of
20 years. A participant's retirement benefit hereunder will be calculated
using his years of service and average annual earnings as of the actual date
of his retirement.
4.2 Retirement after early retirement age but before normal retirement
age. A participant who retires on or after attaining early retirement age but
before attaining normal retirement age and who has completed five years of
service will receive a supplemental monthly pension equal to one-twelfth of
the amount determined using the formula in Section 4.1 above, multiplied by an
early retirement factor determined under the following table:
Years by which the Early
start of payments precedes retirement
normal retirement age *factor
7 .65
6 .70
5 .75
4 .80
3 .85
2 .90
1 .95
*Interpolate for completed months.
Notwithstanding the foregoing, in the event of a change in control of
the Company a participant who subsequently retires on or after attaining early
retirement age but before normal retirement age will receive the benefits
provided under this Section 4.2 whether or not he has completed five years of
service.
4.3 Effect of change in control prior to attainment of early
retirement age. In the event of a change in control of the Company prior to
the attainment of early retirement age by any participant, such participant
will receive upon his retirement thereafter a supplemental monthly pension
equal to one-twelfth of the amount determined using the formula in Section 4.1
above, multiplied by an early retirement factor determined under the following
table:
Years by which the Early
start of payments precedesretirement
normal retirement age *factor
30 .10
29 .11
28 .12
27 .13
26 .14
25 .15
24 .16
23 .17
22 .18
21 .20
20 .21
19 .23
18 .25
17 .27
16 .30
15 .32
14 .35
13 .38
12 .41
11 .45
10 .49
9 .54
8 .59
*Interpolate for completed months.
4.4 Form of Payment.
(a) Normal form of retirement benefits. The normal form of
retirement benefit payable to a participant 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 a participant's retirement.
(b) Optional lump sum benefit. In lieu of the normal form of
benefit, a participant 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 5.2(c)). Actuarial equivalence will be based on
the actuarial assumptions specified from time to time in the retirement plan
for lump sum payments. A participant'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 the participant submits the election, provided that
elections submitted on or before May 1, 1997 will be immediately effective.
4.5 Enhanced benefits for certain retirees. Certain retirees have
been provided enhanced retirement benefits as set forth in Schedule A hereto.
SECTION 5. SURVIVING SPOUSE BENEFIT
5.1 Eligibility. The surviving spouse of a deceased participant will
receive the surviving spouse benefit if:
(a) the participant dies (i) during employment with an employer
on or after he has completed at least five years of service and his combined
age and years of service total 50 or more, or (ii) after retirement; and
(b) the spouse and the deceased participant were married to each
other for at least the 12 months preceding the participant's date of death
and, in the case of a participant who dies after retirement, were married to
each other on the participant's date of retirement.
5.2 Amount of surviving spouse benefit. Subject to the reductions
described in Section 7.2 below, the benefit provided under the plan to the
surviving spouse of a participant will be determined as follows.
(a) Pre-retirement before normal retirement age. If a
participant dies during employment with an employer and before his normal
retirement age, his surviving spouse will receive a monthly survivor income
payment equal to 50% percent of the participant's monthly projected retirement
benefit. A participant's monthly projected retirement benefit is the monthly
benefit he would have received at normal retirement age under Section 4.1
calculated using the number of years of service he would have had if he had
continued in employment with an employer until normal retirement age and his
average annual earnings determined as of his date of death.
(b) Pre-retirement on or after normal retirement age. If the
participant dies during employment with an employer on or after his normal
retirement age, his surviving spouse will receive a monthly survivor income
payment equal to 50 percent of his monthly retirement benefit earned under
Section 4.1 using his number of years of service and his average annual
earnings as of his date of death.
(c) Post-retirement. If a participant dies on or after his date
of 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).
5.3 Form and time of surviving spouse benefit. Surviving spouse
benefits under this Section 5 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 on or after the date of the participant's death.
5.4 Death benefit where lump sum paid. If a participant received a
lump sum payment of his benefit under Section 4.4(b), no surviving spouse
benefit or other death benefit will be payable under the plan to any person.
SECTION 6. DISABILITY
6.1 Service during disability. A participant who suffers a total
disability, as defined in the disability income plan, will continue to be
credited with service as if he were actively employed by an employer during
his period of total disability. If such a participant does not return to
active service with an employer, his benefit under Section 4 will be
calculated using his average annual earnings as of his disability date, his
total service including service credited under the preceding sentence, and his
primary social security benefit calculated as of the date of his disability.
6.2 Period of disability. A participant's date of disability is his
last day of work for his employer before becoming unable to continue working
because of his total disability. A period of total disability of a
participant 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.
6.3 Death while disabled. If a participant dies while disabled, his
surviving spouse will, if eligible, receive the pre-retirement surviving
spouse benefit determined under Section 5.2(a) or (b).
6.4 No duplication of benefits. A participant may not receive
benefits under this plan at any time when he is receiving disability income
benefits under the disability income plan.
SECTION 7. OFFSET FOR OTHER PAYMENTS
7.1 Retirement benefit offsets. The retirement benefit of a
participant will be reduced (but not below zero) by the following payments,
with such reductions starting when such benefits are assumed to begin: (a)
100% percent of the social security benefit of the participant assuming such
benefit begins on the later of his normal retirement age 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 the later of his early retirement age or his
actual retirement.
7.2 Death benefit offsets. The benefit of a 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 8. BENEFITS NOT CURRENTLY FUNDED
8.1 No funding. Nothing in this plan will be construed to create a
trust or to obligate the Company 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 any participant or any other person rights to any specific
assets of the Company or of any other employer or entity.
8.2 Grantor trust. Notwithstanding Section 8.1, the Company has
established a grantor trust of which it is treated as the owner under Section
671 of the Internal Revenue Code.
SECTION 9. 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 10. RIGHTS NON-ASSIGNABLE
No participant, surviving spouse, or 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 11. EXCESS BENEFIT PLAN
This plan will supersede any obligation to pay to participants excess
plan benefits under the excess benefit plan contained in the retirement plan,
as such plan may be amended from time to time; no excess plan benefits will be
payable under such excess benefit plan to participants.
SECTION 12. AMENDMENT OR TERMINATION
The Company reserves the right at any time by action of the board to
terminate the plan or to amend its provisions in any way. In addition, if the
retirement plan is terminated, this plan will automatically terminate also as
of the same effective date. Notwithstanding the foregoing, no termination or
amendment of the plan may reduce the benefits payable under the plan to any
person with respect to a participant whose employment with his employer was
terminated before such termination or amendment and no termination or
amendment may reduce the benefits to be paid with respect to a participant on
the date of such termination or amendment below the amount which such
participant would have received if his employment had terminated on the date
before such termination or amendment.
EXECUTED as of October 16, 1996.
TECO ENERGY, INC.
By:________________________________
Roger A. Dunn
Vice President - Human Resources
SCHEDULE A
Enhanced Retirement Benefits
A.1. David N. Campbell and G. Pierce Wood. The retirement benefits of David
N. Campbell and G. Pierce Wood are to be calculated as though each had
continued in employment until age 62 with annual earnings equal to the rate of
earnings in effect on his date of termination of employment.
A.2. 1994-95 Early Retirement Window.
(a) The retirement benefits of each of the following participants are
to be calculated by using the factors set forth below:
Name Increase in Age Increase in Service
William T. Snyder 3 years, 8 months n/a
Robert T. Tomczak 3 years 3 years
Fred W. Maggard 4 years 4 years
R.D. Cornwell 4 years 4 years
(b) Average annual earnings for each of Philip G. Flood and John G.
Graham is to be calculated using the three consecutive calendar years out of
the five calendar years preceding the date of retirement which yield the
highest average.
A.3. Larry D. Noland. The retirement benefit of Larry D. Noland is to be
calculated as though he were age 62 1/2 on his retirement date, resulting in
an increase in the benefit otherwise payable under the plan of $1,062.93 per
month.