Exhibit 10a(1)
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
DEFERRED COMPENSATION PLAN FOR DIRECTORS
Amended Effective December 1, 2005
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
DEFERRED COMPENSATION PLAN FOR DIRECTORS
Amended Effective December 1, 2005
1 PURPOSE. The Plan is designed to provide a method of deferring payment
to non-employee Directors of their fees and annual retainers, as fixed from time
to time by the Board of Directors, until termination of their services on the
Board.
2. PLAN PERIODS. The first Plan Period shall commence upon the election of
Directors at the 1987 Annual Stockholders' Meeting and terminate upon the
election of Directors at the 1988 Annual Stockholders' Meeting. Subsequent Plan
Periods shall relate to successive similar periods between Annual Stockholders
Meetings. Effective January 1, 2002, Plan Periods shall be calendar year
periods.
3. ADMINISTRATION. The Plan shall be administered by a Committee
consisting of the Chief Executive Officer of the Company and two other officers
appointed by him. The Committee shall have the power to interpret the Plan and,
subject to its provisions, to make all determinations necessary or desirable for
the Plan's administration.
4. PARTICIPATION.
(a) An individual who serves as a Director and is not otherwise employed
by the Company or any of its subsidiaries shall be eligible to
participate in the Plan if he or she elects to have payment of his
or her annual retainer, his or her fees or his or her annual
retainer and fees in respect of a Plan Period deferred as provided
herein.
(b) All elections to defer must be made in the calendar year prior to
the year that the services giving rise to the compensation are
performed. The election shall be made by written notice to the Plan
filed with the Company's Secretary prior to the first day of such
Plan Period or, in the case of a Director who first becomes eligible
during a Plan Period, not later than 30 days after he or she first
becomes eligible. Except as otherwise provided herein, each such
election shall be irrevocable.
(c) Special One-Time Election to Rescind 2005 Deferrals - Not later than
December 30, 2005, Participants who had elected to defer
compensation during 2005 may, by written notice, the form of which
shall be designated and published by the Committee, rescind his/her
election to defer 2005 compensation and such amounts shall be
currently paid to the Participant.
5. DEFERRED COMPENSATION ACCOUNTS.
(a) An account shall be established for each eligible electing Director
(a "Participant") which shall be designated as his or her Deferred
Compensation Account. If a Participant elects to have payment
deferred of his or her annual retainer, the amount of the annual
retainer payable to him or her with respect to a Plan Period shall
be credited, in four equal installments on or about the last day of
March, June, September and December in the Plan Period to which
such retainer relates, to his or her Deferred Compensation Account,
subject to the provisions of Section 5(c). If a Participant elects
to have payment deferred of his or her fees, the amount of each fee
payable to him or her for attendance at a meeting during a Plan
Period shall be credited to his or her Deferred Compensation Account
on or about the first business day following such meeting. The
Company shall not be required to segregate any amounts credited to
the Deferred Compensation Accounts, which shall be established
merely as an accounting convenience. Amounts credited to the
Deferred Compensation Accounts shall at all times remain solely the
property of the Company subject to the claims of its general
creditors and available for the Company's use for whatever purpose
desired.
(b) A Director, except a Director not actively serving on the Board on
April 1, 2000, may direct investment of his or her Account among the
Investment Funds (hereinafter defined) (in the manner established by
the Committee) in multiples of one percent; provided, however, that
the Committee shall not be obligated to effectuate any such
investment direction. The amounts credited to a Deferred
Compensation Account shall accrue earnings credits as determined by
the Investment Fund(s) selected by the Director. In the case of (i)
Director not actively serving on the Board on April 1, 2000 and (ii)
a Director who fails to provide a designation of Investment Funds,
each such Director shall be deemed to have designated 100 percent of
his or her Account to be invested in the Investment Fund that
determines income accrual with reference to the prime commercial
lending rate of JPMorgan Chase Bank (formerly, the Chase Manhattan
Bank). Except with respect to an investment election related to (a)
an election made within 30 days of April 1, 2000 and (b) any
Investment Fund which is discontinued during a Plan Year, each of
which shall be effective immediately, a Director's investment
election may be changed annually and will be effective from January
1 of the Plan Year next following receipt of the Director's
investment election form.
Each Director's Account shall be credited with a rate of return on
the last day of March, June, September and December equal to the
rate of return experienced by the Investment Fund selected by the
Director for the same period. The fair market value of each
Investment Fund shall be determined by the Committee and shall
represent the fair market value of all securities and other property
held by the Investment Fund.
2
(c) 'Investment Fund' - the fund or funds selected by the Committee from
time to time and included in Schedule C of the Plan which shall
serve as a means of measuring the increase or decrease of each
Director's Account. The Committee may, in its discretion, add or
discontinue any Investment Fund available under the Plan. The
Committee shall provide each affected Director with the opportunity,
without limiting or otherwise impairing any other right of such
Director regarding changes in investment directions, to redirect the
allocation of his or her Account invested in any discontinued
Investment Fund among the other Investment Funds available under the
Plan, including any replacement investment vehicle.
(d) If, prior to the end of a Plan Period, a Participant becomes an
employee of the Company or one of its subsidiaries or dies or ceases
for any reason to be a Director, or if the effective date of
participation by a Participant for any Plan Period shall be other
than the first day thereof, he or she will be entitled to be
credited with that proportion of the annual retainer for the full
Plan Period which the number of days of his or her participation in
the Plan during such Plan Period bears to the total number of days
in such Plan Period.
6. PAYMENT.
(a) Following termination of a Participant's service on the Board, the
Company shall distribute his or her Deferred Compensation Account.
(b) By written notice to the Plan filed with the Company's Secretary, a
Participant may elect to have distribution of his or her Deferred
Compensation Account commence either (1) on the 30th day following
the date of termination of the Participant's service on the Board,
(2) on the 15th day of January next following the date of
termination of the Participant's service on the Board or (3) on the
15th day of January of any calendar year following termination of
the Participant's service on the Board, but not later than the
January following the Participant's 71st birthday, unless the
Participant is still a Director at such time, in which case
distribution shall commence on the 30th day following the date the
Participant ceases to be a Director. Any such election, or any
change in such election (by such subsequent written notice to the
Secretary of the Company), shall apply only to future deferrals. In
the event no election is made as to the commencement of
distribution, such distribution shall commence on the 30th day
following the date the Participant ceases to be a Director of the
Company.
(c) By written notice to the Plan filed with the Company's Secretary, a
Participant may elect to receive the distribution of his or her
Deferred Compensation Account in the form of (1) one lump-sum
payment, or (2) annual distributions over a period selected by the
Participant of up to ten years. In the event a lump-sum payment is
made under the Plan, the amount then standing to the Participant's
credit in his or her Deferred Compensation Account, including
earnings credits provided in Section 5(b) to the date of
distribution, shall be paid to the Participant
3
on the date determined under Section 6(b). In the case of a
distribution over a period of years, the Company shall pay to the
Participant, commencing on the date determined under Section 6(b),
annual installments from the amount then standing to his or her
credit in his or her Deferred Compensation Account, including
earnings credits on the unpaid balance at the rate provided in
Section 5(b) to the date of distribution. The amount of each
installment shall be determined by dividing the then unpaid balance,
plus earnings credits, in the Participant's Deferred Compensation
Account by the number of installments remaining to be paid. If a
Participant does not make an election as to the manner of
distribution of his or her Deferred Compensation Account, such
distribution shall be made in the form of annual installments paid
over a five-year period.
(d) The payment of all distributions shall be made in money by check,
except that the portion of a Participant's Deferred Compensation
Account that is allocated to the Investment Fund based upon the
performance of this Corporation's common stock may elect to receive
distributions with respect to that portion of his/her Deferred
Compensation Account in shares of common stock. Any amounts related
to fractional shares shall be paid in money by check.
(e) In the event of a Participant's death, the balance of the
Participant's Deferred Compensation Account shall be distributed to
the Participant's Beneficiary(ies) in annual installments over a
period of not more than five years, in accordance with the
Participant's election on Schedule B to the Plan filed with the
Secretary of the Company. Any change in the period over which such
payments are made shall only apply to future deferrals. Such
distribution shall be made in a manner consistent with Section 6(c)
of the Plan and shall commence on the 30th day following the
Participant's death. Additional annual payments for distributions
made over a period of more than one year shall be made on the yearly
anniversaries of such date. In the event of a Participant's death
after distribution of this Deferred Compensation Account has
commenced, any election under this Section 6(d) shall not extend the
time of payment of his or her Deferred Compensation Account beyond
the time when distribution would have been completed if the
Participant had lived. A Participant may change Beneficiary
designations by filing a subsequent Schedule B with the Secretary of
the Company. If a Participant does not make an election as to the
manner of distribution of his or her Deferred Compensation Account
in the event of his or her death, any such distribution shall be
made as a lump-sum payment to his or her estate on the 30th day
following the Participant's death.
(f) Participants may, (i) by notice filed with the Company prior to
December 31st of any year, make changes of distribution elections on
a prospective basis; (ii) by notice filed with the Company, make
changes of distribution elections with respect to prior deferred
compensation as long (A) any such new distribution election is made
at least one year prior to the date that the commencement of the
distribution would otherwise have occurred and (B) the revised
commencement
4
date is at least five years later than the date that the
commencement of the distribution would otherwise have occurred;
(iii) Special One-Time Election - by notice filed with the Company
prior to December 31, 2005, make a one-time election to change any
distribution election previously made with respect to compensation
deferred on or before December 31, 2005.
(g) Notwithstanding any other provision of the Plan, if the Committee
shall determine in its sole discretion that the time of payment of a
Participant's Deferred Compensation Account should be advanced
because of protracted illness or other undue hardship, then the
Committee may advance the time or times of payment (whether before
or after the Retirement Date) only if the Committee determines that
an emergency beyond the control of the Participant exists and which
would cause such Participant severe financial hardship if the
payment of such benefits were not approved. Any such distribution
for hardship shall be limited to the amount needed to meet such
emergency (plus the amount of any tax liability resulting from the
distribution). A Participant who receives a hardship distribution
may not reenter the Plan for twelve months after the date of such
distribution. Any distribution for hardship under this Section 6(f)
shall commence on the 15th day following the date the Committee
determines to make such hardship distribution.
(h) Distribution in Case of Certain Tax Events - If, with respect to any
Participant, the Plan fails to meet the requirements of the Internal
Revenue Code with respect to the deferral of tax liability, the
Company may accelerate distribution from a Participant's Account
amounts sufficient to meet such Participant's resulting Federal,
State, Local and/or Foreign tax liability (including any interest
and penalties).
7. ASSIGNMENT. No benefit under the Plan shall in any manner or to any
extent be assigned, alienated, or transferred by any Participant or Beneficiary
or subject to attachment, garnishment or other legal process.
8. TERMINATION AND AMENDMENT.
(a) The Board may terminate the Plan at any time so that no further
amounts shall be credited to Deferred Compensation Accounts or may,
from time to time, amend the Plan, without the consent of
Participants or Beneficiaries; provided, however, that no such
amendment or termination shall impair any rights, including rights
to income credits pursuant to Section 5(b) hereof, which have
accrued under the Plan without the consent of the Participant or
Beneficiary, or the legal representative of such person, so
affected.
(b) Notwithstanding any other provision of this Plan, upon the
occurrence of a Change in Control (as defined below), the income
credit calculated pursuant to
5
Section 5(b) hereof may not be reduced below the prime commercial
lending rate described therein.
For purposes of this Plan, "Change in Control" shall mean the
occurrence of any of the following events:
(i) any "person" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended from time to time
(the "Act")) is or becomes the beneficial owner within the
meaning of Rule l3d-3 under the Act (a "Beneficial Owner"),
directly or indirectly, of securities of the Corporation (not
including in the securities beneficially owned by such person
any securities acquired directly from the Corporation or its
affiliates) representing 25% or more of the combined voting
power of the Corporation's then outstanding securities,
excluding any person who becomes such a Beneficial Owner in
connection with a transaction described in clause (1) of
paragraph (iii) below; or
(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals
who, on December 15, 1998, constitute the Board of Directors
and any new director (other than a director whose initial
assumption of office is in connection with an actual or
threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Corporation) whose appointment or election by the Board of
Directors or nomination for election by the Corporation's
stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors on December 15, 1998 or whose
appointment, election or nomination for election was
previously so approved or recommended; or
(iii) there is consummated a merger or consolidation of the
Corporation or any direct or indirect wholly owned subsidiary
of the Corporation with any other corporation, other than (1)
a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior to
such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of
the Corporation or any subsidiary of the Corporation, at least
75% of the combined voting power of the securities of the
Corporation or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or
(2) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction)
in which no person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Corporation
representing
6
25% or more of the combined voting power of the Corporation's
then outstanding securities; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation or dissolution of the Corporation or there is
consummated an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's
assets, other than a sale or disposition by the Corporation of
all or substantially all of the Corporation's assets to an
entity, at least 75% of the combined voting power of the
voting securities of which are owned by stockholders of the
Corporation in substantially the same proportions as their
ownership of the Corporation immediately prior to such sale.
Notwithstanding the foregoing subparagraphs (i), (ii), (iii) and
(iv), a "Change in Control" shall not be deemed to have occurred by
virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record
holders of the common stock of the Corporation immediately prior to
such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Corporation
immediately following such transaction or series of transactions.
9. WHAT CONSTITUTES NOTICE.
Any notice to an Participant, Beneficiary or legal representative
hereunder shall be given either by delivering it or by depositing it in the
United States mail, postage prepaid, addressed to his/her last known address.
Any notice to the Company or the Committee hereunder (including the filing of
election and designation forms) shall be given either by delivering it, or
depositing it in the United States mail, postage prepaid, to the Secretary of
the Employee Benefits Policy Committee, Public Service Enterprise Group
Incorporated, 80 Park Plaza, P. O. Box 1171, Newark, New Jersey 07102.
10. ADVANCE DISCLAIMER OF ANY WAIVER ON THE PART OF THE COMPANY. Failure
by the Company to insist upon strict compliance with any of the terms, covenants
or conditions hereof shall not be deemed a waiver of any such term, covenant or
condition, nor shall any waiver or relinquishment of any right or power
hereunder at any one or more times be deemed a waiver or relinquishment of any
such right or power at any other time or times.
11. EFFECT ON INVALIDITY OF ANY PART OF THE PLAN. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision.
7
12. PLAN BINDING ON ANY SUCCESSOR OWNER. Except as otherwise provided
herein, this Plan shall inure to the benefit of and be binding upon the Company,
its successors and assigns, including but not limited to any corporation which
may acquire all or substantially all of the Company's assets and business or
with or into which the Company may be consolidated or merged.
13. LAWS GOVERNING THIS PLAN. Except to the extent federal law applies,
this Plan shall be governed by the laws of the State of New Jersey. This Plan is
specifically intended to comply with the provisions of the The American Jobs
Creation Act of 2004 (the "AJCA") and Section 409A of the Code and it shall
automatically incorporate all applicable restrictions of the AJCA, the Code and
its related regulations, and the Company will amend the Plan to the extent
necessary to comply with those requirements. The timing under which a
Participant will have a right to receive any payment under this Plan will be
deemed to be automatically modified, and a Participant's rights under the Plan
limited to conform to any requirements under, the AJCA, the Code and its related
regulations.
14. MISCELLANEOUS. The masculine pronoun shall mean the feminine wherever
appropriate.
8
SCHEDULE A
DEFERRED COMPENSATION PLAN FOR DIRECTORS OF
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (THE "PLAN")
ELECTIONS IN CONNECTION WITH DEFERRAL OF COMPENSATION
Section 1. Election as to Compensation to be Deferred
Note: THIS SECTION IS TO BE USED TO MAKE OR TO CHANGE AN ELECTION UNDER
SECTION 4 OF THE PLAN. ANY CHANGE IN ELECTION WILL ONLY APPLY TO
SUBSEQUENT PLAN PERIODS.
I hereby elect to defer, in accordance with the provisions of the Plan:
__________ (a) My retainer.
__________ (b) My fees.
__________ (c) My retainer and my fees.
Section 2. Election as to Commencement of Distribution From Account
Note: THIS SECTION IS TO BE USED (A) WHEN FIRST BECOMING A DIRECTOR
COVERED BY THE PLAN AND (B) PRIOR TO EACH ANNUAL MEETING IF THERE IS
TO BE ANY CHANGE IN THE ORIGINAL ELECTION. ANY SUCH CHANGE WILL ONLY
APPLY TO FUTURE DEFERRALS.
I hereby elect, in accordance with the provisions of the Plan, to have
distribution from my Account commence:
__________ (a) Within thirty (30) days after I cease to be a director
of the Company.
__________ (b) In the month of January after I cease to be a director
of the Company.
__________ (c) In the month of January, _________, (which is not later
than the January following my 71st birthday), unless I am a
director of the Company at such time, in which case within
30 days after I cease to be a director of the Company.
Participant's Initials__________
Date__________
SCHEDULE A-2
Section 3. Election as to the Timing of the Distribution
Note: THIS SECTION IS TO BE USED (A) WHEN FIRST BECOMING A DIRECTOR
COVERED BY THE PLAN AND (B) PRIOR TO EACH ANNUAL MEETING IF THERE IS
TO BE ANY CHANGE IN THE ORIGINAL ELECTION. ANY SUCH CHANGE WILL ONLY
APPLY TO FUTURE DEFERRALS.
I hereby elect, in accordance with the provisions of the Plan, to have the
distribution of my Account paid:
__________ (a) In one lump sum.
__________ (b) In annual installments over a period of __________ years
(up to 5).
Date:__________
____________________________________ ____________________________________
Witness Participant's Signature
SCHEDULE B
DEFERRED COMPENSATION PLAN FOR DIRECTORS OF
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (THE "PLAN")
Section 1. Election as to Method of Distribution in Case of Death
In case of my death, I hereby elect, in accordance with the provisions of
the Plan, to have the distribution of my Deferred Compensation Account paid over
a period of _________ year(s) to my Beneficiary(ies) designated in Section 2
hereof.
Section 2. Designation of Beneficiary(ies)
In the event of my death, I hereby designate the following individuals,
fiduciaries or other entities, in their own right or in their representative
capacity, in the proportions and in the priority of interest designated, to be
the beneficiaries of any benefits owing to me, under the Plan.
PRIMARY BENEFICIARIES - The following beneficiary(ies) shall receive all
benefits payable under the Plan in the event of my death in the proportions
designated hereunder. If any one or more of the primary beneficiaries designated
hereunder shall predecease me, such beneficiary's share(s) shall be divided
equally among the remaining primary beneficiaries.
PROPORTIONATE
NAME AND PRESENT INTEREST OF RELATIONSHIP
ADDRESS OF PRIMARY PRIMARY TO
BENEFICIARY(IES) BENEFICIARY(IES) PARTICIPANT
_______________________
_______________________ __________% ______________
_______________________
_______________________ __________% ______________
_______________________
_______________________ __________% ______________
_______________________
_______________________ __________% ______________
Participant's Initials__________
Date__________
SCHEDULE B-2
SECONDARY BENEFICIARIES - The following beneficiary(ies) shall receive all
benefits payable under the Plan in the event of my death in the proportions
designated hereunder only if all of my Primary Beneficiaries have predeceased
me. If all Primary Beneficiaries have predeceased me and if any one or more of
the Secondary Beneficiaries designated hereunder shall predecease me, such
Secondary Beneficiary's share(s) shall be divided equally among the Secondary
Beneficiaries.
PROPORTIONATE
NAME AND PRESENT INTEREST OF RELATIONSHIP
ADDRESS OF SECONDARY SECONDARY TO
BENEFICIARY(IES) BENEFICIARY(IES) PARTICIPANT
_______________________
_______________________ __________% ______________
_______________________
_______________________ __________% ______________
_______________________
_______________________ __________% ______________
_______________________
_______________________ __________% ______________
ESTATE - In the event I have declined to designate a Beneficiary hereunder
or if all of the Beneficiaries that I have designated predecease me, then all
benefits payable under the Plan shall be payable to my Estate.
Date:__________
____________________________________ ____________________________________
Witness Participant's Signature
SCHEDULE C 2006
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
DEFFERRED COMPENSATION PLAN FOR DIRECTORS (THE "PLAN")
INVESTMENT FUND ELECTION OPTIONS
I hereby select the rate of return for my total account, including any deferred
amounts to be made in 2002, to be based upon the following investment fund
election option (elections are made in multiples of 1% and must total 100%):
1. _____ An annual rate equal to the rate charged by JPMorgan Chase
Bank (formerly, The Chase Manhattan Bank, N.A.) on the first
business day of each calendar quarter for prime commercial
loans of 90 day maturity (based on actual number of days, 360
days to the year), plus 1/2 of 1%.
2. _____ An annual rate equal to the rate of return of the
Conservative Pre-Mixed Portfolio of this Corporation's
Thrift and Tax-Deferred Savings Plan (the "Thrift Plan").
3. _____ An annual rate equal to the rate of return of the Moderate
Pre-Mixed Portfolio of this Corporation's Thrift Plan.
4. _____ An annual rate equal to the rate of return of the Aggressive
Pre-Mixed Portfolio of this Corporation's Thrift Plan.
5. _____ An annual rate equal to the rate of return of the Large
Company Stock Index Fund of this Corporation's Thrift Plan.
6. _____ An annual rate equal to the rate of return on this
Corporation's Common Stock with dividends invested as of the
last business day of each quarter and share price equal to
the average of the high and low actual sale prices of the
Common Stock on the New York Stock Exchange on the date the
transaction is credited. Please check one of the following:
I wish my distribution from this Fund in:
Cash____ Stock____
TOTAL 100%
Note: This Schedule C is to make an initial Investment Fund Election or to
change a current Investment Fund Election. If you have never made an election,
your account will earn a rate of return based on the Prime Rate plus one half of
one percent. If you have made an election, your investment election will apply
to your existing account balance(s) and future deferrals and will remain in
effect until changed by you in a subsequent year.
Investment options 2-6 are based on the experience of the stock market and there
is the potential for losses as well as gains.
Changes cannot be made after December 31, 2005.
Such earnings credit shall be computed on the average daily balance in your
Account during each calendar quarter, excluding any assets which have been
distributed from your Account during such quarter, and shall be credited to your
Account and compounded as provided for in the Plan.
_____________________________________ ________________________
SIGNATURE DATE