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EXHIBIT 10A(5)(II)
LIMITED SUPPLEMENTAL BENEFITS PLAN
FOR CERTAIN EMPLOYEES OF
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
March 31, 1993
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LIMITED SUPPLEMENTAL BENEFITS PLAN
FOR CERTAIN EMPLOYEES OF
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
TABLE OF CONTENTS
PAGE
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1. PURPOSE................................................... 1
2. DEFINITIONS OF TERMS USED IN THE PLAN..................... 1
3. DEATH BENEFIT............................................. 2
4. RETIREMENT BENEFIT........................................ 3
5. ADMINISTRATION OF ACCOUNTS................................ 4
6. DESIGNATION OF BENEFICIARIES.............................. 4
7. LIMITATION OF BENEFITS.................................... 5
8. COMMITTEE MAY MAKE CERTAIN LUMP-SUM
DISTRIBUTIONS........................................... 6
9. PLAN DOES NOT CONSTITUTE AN EMPLOYMENT
AGREEMENT............................................... 6
10. AMENDMENT OR TERMINATION OF THE PLAN....................... 6
11. WHAT CONSTITUTES NOTICE.................................... 6
12. ADVANCE DISCLAIMER OF WAIVER............................... 6
13. EFFECT OF INVALIDITY OF ANY PART OF THE PLAN............... 6
14. PLAN BINDING ON ANY SUCCESSOR.............................. 6
15. FUNCTION OF THE COMMITTEE.................................. 6
16. COMPANY SHALL PAY LEGAL FEES............................... 6
17. LAW GOVERNING THE PLAN..................................... 7
18. MISCELLANEOUS.............................................. 7
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LIMITED SUPPLEMENTAL BENEFITS PLAN
FOR CERTAIN EMPLOYEES OF
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
1. PURPOSE. The purpose of this Plan is to assist the Company in attracting
and retaining a stable pool of key managerial talent and to encourage
long-term key employee commitment to the Company by providing selected
employees of the Company with certain limited supplemental death and
retirement benefits as defined herein. The Plan is intended to provide such
benefits to a select group of management or highly compensated employees
within the meaning of ERISA.
2. DEFINITIONS OF TERMS USED IN THE PLAN. As used in the Plan, the following
words and phrases shall have the meanings indicated:
(a) "ACCOUNT" -- Any account established pursuant to Paragraph 3(b) or 4(e)
of the Plan.
(b) "ANNUITY" -- A fully-funded contract with an independent insurance
company purchased by the Company pursuant to Paragraph 4(e) of the
Plan.
(c) "ASSETS" -- All amounts that have been credited to an Employee's
Account in accordance with Paragraph 3(b), 4(e), or 5(b) of the Plan.
(d) "BENEFICIARY" -- The individual(s) and/or entity(ies) designated in
writing by a Participant in the form attached to the Plan as Schedule
A.
(e) "CHANGE IN CONTROL" -- For the purposes of the Plan, a Change in
Control of the Company shall be deemed to have occurred upon the
happening of any one of the following events:
(i) A filing with the U.S. Securities and Exchange Commission
disclosing that any individual, group or other entity (except for
any employee benefit plan sponsored by the Company or Enterprise or
any trust related to such a plan) is the beneficial owner, directly
or indirectly, of 10% or more of the Voting Stock of Enterprise;
(ii) The purchase by any individual, group or other entity (other
than by Enterprise or an affiliate of Enterprise) pursuant to a
tender or exchange offer that results in such individual, group
or entity being the beneficial owner, directly or indirectly, of
10% or more of the Voting Stock of Enterprise;
(iii) Approval by the stockholders of Enterprise or the Company, as the
case may be, of any merger or consolidation of Enterprise or the
Company in which the common stockholders of Enterprise or of the
Company, as the case may be, do not continue substantially the
same proportionate ownership of the common stock of the
surviving entity;
(iv) Approval by stockholders of the sale or transfer of the Company to
an unrelated entity;
(v) The sale or transfer, or taking by eminent domain or otherwise, of
all or substantially all of the assets of the Company; or
(vi) A change in the majority of the Board of Directors of the Company
or of Enterprise within any twelve (12) month period.
Except that a Change in Control shall not be deemed to have occurred with
respect to the events noted in items (iii), (iv) or (v) hereof if the
transaction, or in the case of the event noted in item (vi) hereof, if the
election or nomination for election by the stockholders of each new
director, shall have been approved by a vote of three-fourths of the
directors of the Company with respect to Company directors and of the
directors of Enterprise, with respect to Enterprise directors, then still
in office who were in office prior to the event, or in the case of item
(vi) hereof, at the beginning of the twelve (12) month period.
(f) "CODE" -- The Internal Revenue Code of 1986, as amended.
(g) "COMMITTEE" -- The Employee Benefits Committee of the Company as
selected by its Board of Directors.
(h) "COMPANY" -- Public Service Electric and Gas Company.
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(i) "COMPENSATION" --
(i) For the purposes of calculating the Death Benefit pursuant to
Paragraph 3 of the Plan, as to any Participant, Compensation shall
be equal to the annual rate of salary of the Participant in effect
at the date of death; and
(ii) For the purposes of calculating the Retirement Benefit pursuant to
Paragraph 4 of the Plan, as to any Participant, Compensation
shall be equal to the average of the total remuneration paid to
such Participant for services rendered to the Company, excluding
the Company's cost for any public or private employee benefit plan
(including, without limitation, the Long-Term Incentive
Compensation Plan of Enterprise) but including all elective
contributions that are made by the Company on behalf of a
Participant which are not includable in income under Code Sections
125 or 401(k), for the five years ending at the earlier of such
Participant's date of Retirement or attainment of normal retirement
age under the Pension Plan; provided, however, that for the
purposes of Paragraph 4 of the Plan, Compensation with respect to
any Participant shall not exceed the amount which is 120% of the
average annual base salary of the Participant for the applicable
five-year period.
(j) "ENTERPRISE" -- Public Service Enterprise Group Incorporated.
(k) "ERISA" -- The Employee Retirement Income Security Act of 1974, as
amended.
(l) "PARTICIPANT" -- Each employee of the Company nominated by the Chief
Executive Officer and designated by the Board of Directors of the
Company. The Chief Executive Officer of the Company shall nominate such
select and key employees of the Company upon such terms as he shall
deem appropriate due to the employee's responsibilities and
opportunity to contribute substantially to the financial and
operating objectives of the Company.
(m) "PENSION PLAN" -- The Pension Plan of Public Service Electric and Gas
Company.
(n) "PLAN" -- The Limited Supplemental Benefits Plan for Certain Employees
of Public Service Electric and Gas Company.
(o) "RETIREMENT" -- For the purposes of the Plan, Retirement of a
Participant shall be deemed to have occurred upon either (i)
termination of the Participant's service with the Company with the
right to an immediate benefit under the Pension Plan or (ii) upon a
Change in Control of the Company. Retirement shall not include
termination of service with the right to a deferred pension.
(p) "RETIREMENT PLAN" -- Any pension plan within the meaning of ERISA,
excluding (i) the Pension Plan and all defined contribution plans
maintained by the Company, except insofar as any such defined
contribution plan may provide supplementary benefits to the Pension
Plan, (ii) this Plan and (iii) all deferred compensation plans, tax
credit employee stock ownership plans and thrift plans, and all other
profit-sharing plans which are not the principal retirement benefit
of a plan sponsor, maintained by sponsors other than the Company.
(q) "VOTING STOCK" -- Outstanding stock of a corporation entitled to vote
in the election of the directors of that corporation.
3. DEATH BENEFIT.
(a) AMOUNT OF BENEFIT -- If a Participant dies while in the active
employment of the Company, the Company shall provide a death benefit to
such Participant's Beneficiary in an amount equal to 150% of the
Participant's Compensation, adjusted to the nearest $1,000, or to the
next highest $1,000 if such Compensation is a multiple of $500 but not
of $1,000.
(b) ESTABLISHMENT OF ACCOUNT -- Upon the death of a Participant during
employment with the Company, the Company shall establish an Account for
the benefit of such Participant's Beneficiary. Such Account shall
initially be credited with an amount equal to the benefit provided
under Paragraph 3(a) and shall be held and administered as provided in
Paragraph 5 of the Plan.
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4. RETIREMENT BENEFIT.
(a) GENERAL -- At Retirement, the Company shall provide each Participant
with a retirement benefit calculated as provided in this Paragraph 4.
(b) DETERMINATION OF BENEFIT --
(i) The Participant's Compensation shall be multiplied by an amount
equal to one one-hundredth of the sum of (A) the number of the
Participant's years of credited service under the Pension Plan at
Retirement, (B) the number of any additional years of service credit
to which the Participant may be entitled from the Company under any
written arrangement with the Company, and (C) 30; but, in no event,
shall the multiple be greater than 0.75.
(ii) The amount determined under subparagraph (i) of this Paragraph 4(b)
shall be reduced by the sum of (A) the amount the Participant would
be entitled to at Retirement as an annual pension benefit under the
Pension Plan calculated as a single life annuity without reduction
for any pre-retirement survivor's option coverage or any reduction
for early retirement, (B) 100% of the amount of the unreduced annual
Social Security benefit to which the Participant would be entitled at
age 65 (or such other age which may be established by the Social
Security Administration from time to time as the earliest age at
which a Participant may receive an unreduced benefit thereunder),
assuming that the Participant has no earnings from the date of
Retirement to age 65 (or such other applicable age), or, if greater,
any disability benefit under Social Security to which the Participant
may be entitled, and (C) the aggregate of the annual benefits to
which the Participant is entitled under all Retirement Plans as of
the date the Participant is employed by the Company, such Social
Security Benefits and benefits under all Retirement Plans to be
calculated as single life annuities without any reductions, under
rules, procedures and equivalents determined by the Committee. To
determine the amounts referred to under (B) and (C) above, the
Participant shall file a declaration of all such amounts with the
Employee Benefits Department of the Company in such form as the
Committee may require from time to time. No benefit shall be paid
under the Plan until such a declaration, in satisfactory form, shall
be filed with the Employee Benefits Department. If a Participant is
granted a disability Social Security benefit, he shall notify the
Employee Benefits Department thereof within 30 days thereof, and the
Participant's retirement benefit under this Plan shall be adjusted
accordingly. The Company shall be entitled to rely on such statements
in making payment, and if any such statement is incorrect or is not
furnished, the Company shall be entitled to reimbursement from the
Participant, the Beneficiary or their legal representatives for any
overpayment and may reduce or suspend future payments to recover any
such overpayment. In the event it is established to the satisfaction
of the Committee, in its sole discretion, that any such statement was
intentionally false or omitted, the Participant or Beneficiary shall
be entitled to no further payments under the Plan, and the Company
shall be entitled to recover any payments made hereunder.
(c) FORMS OF BENEFIT -- The annual amount determined under paragraph (b) of
this Paragraph 4 shall be paid in one of the following forms:
(i) a single life annuity in monthly installments equal to one twelfth
of such annual amount;
(ii) a joint and survivor annuity in monthly installments based upon
such annual amount and calculated in accordance with any
post-retirement survivorship option available under the Pension Plan;
(iii) a 10-year certain level payment annuity in monthly installments
which is the actuarial equivalent to the single life annuity under
(i), as determined by the actuary for the Pension Plan according to
mortality assumptions used for the Pension Plan on the basis of a
current interest rate assumption determined from time to time by the
Committee; or
(iv) a 10-year certain increasing payment annuity paid in accordance
with Paragraph 5(c) of the Plan based upon the lump-sum amount which
is the actuarial equivalent to the single life annuity under (i), as
determined by the actuary for the Pension Plan according to mortality
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assumptions used for the Pension Plan on the basis of a current
market rate interest assumption determined from time to time by the
Committee.
The Committee in its sole discretion shall determine the form of benefit
payment for each Participant. (d) CHANGE IN CONTROL --
(i) If there shall occur a Change in Control, then each Participant who
has not already retired under the Pension Plan shall be entitled to a
retirement benefit under this Plan calculated as if such Participant
had retired under the Pension Plan as of the date of such Change in
Control.
(ii) The retirement benefit to be paid pursuant to Paragraph 4(d)(i)
shall be paid to the Participant in a 10-year certain level payment
annuity paid in accordance with Paragraph 5(c) of the Plan based upon
the lump-sum amount which is the actuarial equivalent to the
single-life annuity under Paragraph 4(c)(i) of the Plan as determined
by the actuary for the Pension Plan according to mortality
assumptions used for the Pension Plan on the basis of a current
market rate interest assumption determined from time to time by the
Committee.
(iii) Notwithstanding anything contained in the Plan to the contrary, if
a Change in Control shall occur, the Company shall purchase from an
independent insurance company fully paid annuities which shall
provide for the payment to all Participants and Beneficiaries of all
accrued benefits under the Plan.
(e) ESTABLISHMENT OF ACCOUNT -- If payment is made under either Paragraph
4(c)(iii) or 4(c)(iv) of the Plan, upon Retirement, the Company shall
establish an Account for the benefit of the Participant and any
Beneficiary. Such Account shall initially be credited with an amount
equal to the amount of the lump-sum payment determined under Paragraph
4(c)(iii) or 4(c)(iv), as applicable, and shall be administered as
provided in Paragraph 5 of the Plan.
(f) DISABILITY RETIREMENT -- If a Participant retires for disability under
the Pension Plan, payment of the Participant's retirement benefit and
any joint and survivor benefit under Paragraph 4(c)(ii) of the Plan
shall be subject to the same conditions as the disability pension under
the Pension Plan.
5. ADMINISTRATION OF ACCOUNTS.
(a) GENERAL -- Accounts shall be established under the Plan only pursuant
to Paragraphs 3(b) and 4(e) hereof. All Accounts shall be administered
in accordance with the provisions of this Paragraph 5.
(b) INTEREST ON ASSETS IN THE ACCOUNT -- The Assets credited to a
Participant's Account shall accrue interest at a market rate of interest
as may be determined from time to time by the Committee.
(c) TIMING OF THE DISTRIBUTION(S) -- A Participant or Beneficiary shall
receive the distribution of the Participant's Account in the form of
monthly distributions over a ten-year period commencing in the month
following the month of the Participant's death in the case of a death
benefit, or over a ten-year period commencing in the month of the
Participant's Retirement in the case of a retirement benefit. The amount
of each installment shall be determined by dividing the then unpaid
balance in the Participant's Account, including accrued and unpaid
interest, by the number of installments remaining to be paid.
(d) REQUEST FOR CHANGE IN DISTRIBUTION -- A Participant, Beneficiary or
legal representative may request a change in the timing, frequency or
amount of payments made from a Participant's Account by filing a written
request therefor with the Committee. The Committee may, in its sole
discretion, grant such request only if the Committee determines that an
emergency beyond the control of the Participant, Beneficiary or legal
representative exists and which would cause such Participant,
Beneficiary or legal representative 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.
The Committee shall inform the Participant, Beneficiary or legal
representative of its decision within sixty (60) days of receipt of the
written request.
6. DESIGNATION OF BENEFICIARIES
(a) GENERAL -- To designate an individual(s) and/or entity(ies) to receive
the benefits of the Plan with respect to a Participant, such Participant
must file a written designation in the form of Schedule A to
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the Plan with the Committee. Subject to the restrictions of this
Paragraph 6, a Participant may change such designation by filing a
subsequent written designation.
(b) DEATH BENEFIT -- By designation on Section 1 of a Schedule A filed with
the Committee, a Participant may name an individual(s) and/or
entity(ies) to receive a death benefit under Paragraph 3 of the Plan
with respect to such Participant. A Participant may change such
designation by filing a subsequent notification in the form of Schedule
A.
(c) RETIREMENT BENEFITS --
(i) SINGLE LIFE ANNUITY. If a Participant's retirement benefit under
the Plan is paid as a single life annuity under Paragraph 4(c)(i) of
the Plan, there shall be no Beneficiary with respect to such benefit
and all retirement benefits shall cease upon the Participant's death.
(ii) JOINT AND SURVIVOR ANNUITY. If a Participant's retirement benefit
under Paragraph 4(c)(ii) of the Plan and the Participant's pension
under the Pension Plan are both paid as joint and survivor annuities,
any survivor annuity under the Plan shall be paid to the same
beneficiary entitled to any post-retirement survivorship benefit
under the Pension Plan. If the Participant's pension under the
Pension Plan is paid as a single life annuity, any survivor annuity
paid under Paragraph 4(c)(ii) of the Plan shall be paid to the
Beneficiary designated in Section 2 of Schedule A to the Plan. If a
Beneficiary designated by the Participant under Paragraph 4(c)(ii) of
the Plan predeceases the Participant within five years from the date
of Participant's Retirement, the Participant's retirement benefit
hereunder will automatically revert and return to a single life
annuity commencing the first day of the month following the month in
which the designated Beneficiary died. If, however, the Beneficiary
predeceases the Participant more than five years after Participant's
Retirement, the Participant's reduced retirement benefit shall
continue during his life and no survivor benefit shall be paid. The
election of such Beneficiary must be made prior to Retirement and may
not be changed thereafter.
(iii) 10-YEAR CERTAIN ANNUITIES. If a Participant's Retirement benefit
is paid as a 10-year certain level payment annuity under Paragraph
4(c)(iii) or Paragraph 4(d)(ii) of the Plan, or a 10-year certain
increasing payment annuity under Paragraph 4(c)(iv), the Beneficiary
or Beneficiaries with respect to such benefit shall be as specified
in Section 1 of the most recent Schedule A filed with the Committee.
(d) DESIGNATION BY LAST REMAINING BENEFICIARY -- After a Participant's
death, if there is only one remaining Beneficiary with respect to a
death benefit under Paragraph 3 of the Plan or a 10-year certain annuity
under Paragraph 4(c)(iii), 4(c)(iv) or 4(d)(ii) of the Plan, such
Beneficiary shall be entitled to designate in writing to the Committee
an individual to be paid any remainder of such benefit under the Plan at
such Beneficiary's death. If no such further designation is made, such
remainder shall be paid to such Beneficiary's estate. In the event of
such Beneficiary's death, and regardless of whether any such further
designation has been made, the Committee in its sole discretion may
require any such remainder to be paid as a lump sum.
7. LIMITATION OF BENEFITS.
(a) The Plan shall be unfunded with respect to all benefits to be paid
hereunder. In addition, except as provided in Paragraphs 4(d)(iii) and
16(b), the Company shall not be required to segregate any amounts
credited to any Account, which shall be established merely as an
accounting convenience; title to and beneficial ownership of any Assets
credited to any Account shall at all times remain in the Company, and no
Participant, Beneficiary or legal representative shall have any interest
whatsoever in any specific assets of the Company.
(b) The payment of any death or survivorship benefit under this Plan shall
be contingent upon such evidence of death as may be required by the
Committee.
(c) If the Company should terminate the Plan pursuant to Paragraph 10
hereof, the Company's obligation to pay any benefits under the Plan
shall likewise terminate; provided, however, that,
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except as otherwise provided in said Paragraph 10, the Company may not
terminate the Plan with respect to any Participant subsequent to that
Participant's Retirement or death.
8. COMMITTEE MAY MAKE CERTAIN LUMP-SUM DISTRIBUTIONS. The Committee reserves
the right to make a lump-sum distribution, notwithstanding any other
provision of the Plan, if the total benefit payable to a Participant,
Beneficiary or legal representative is $20,000 or less at any time, except
that this $20,000 limitation shall not apply to benefits payable pursuant to
Section 4(d) hereof.
9. PLAN DOES NOT CONSTITUTE AN EMPLOYMENT AGREEMENT. The Plan shall not
constitute a contract for the continued employment of any Participant by the
Company. The Company reserves the right to modify a Participant's
Compensation at any time and from time to time as it considers appropriate
and to terminate any Participant's employment for any reason at any time
notwithstanding the Plan.
10.AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors of the Company
may, in its sole discretion, amend, modify or terminate the Plan at any time,
provided, however, that no such amendment, modification or termination shall
deprive any Participant or Beneficiary of a previously acquired right unless
such Participant or Beneficiary or his legal representative shall consent to
such change. No right to a death benefit under the Plan shall accrue until a
Participant's death and no right to a retirement benefit shall accrue until a
Participant's Retirement.
11.WHAT CONSTITUTES NOTICE. Any notice to a Participant, a Beneficiary or any
legal representative hereunder shall be given in writing, by personal
delivery, overnight express service or by United States mail, postage
prepaid, addressed to such person's last known address. Any notice to the
Company or the Committee hereunder (including the filing of Schedule A) shall
be given by delivering it in person or by overnight express service, or
depositing it in the United States mail, postage prepaid, to the Secretary of
the Employee Benefits Committee, Public Service Electric and Gas Company, 80
Park Plaza, T21F, P.O. Box 570, Newark, New Jersey, 07101.
12. ADVANCE DISCLAIMER OF WAIVER. Failure by the Company or the Committee 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.
13. EFFECT OF 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 of the Plan.
14. PLAN BINDING ON ANY SUCCESSOR. Except as otherwise provided herein, the
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.
15. FUNCTION OF THE COMMITTEE. The Plan shall be administered by the Committee
and the Committee shall be the final arbiter of any question that may arise
under the Plan.
16. COMPANY SHALL PAY LEGAL FEES.
(a) In the event of a Change in Control, the Company shall pay the legal
fees and expenses of any Participant, Beneficiary or legal
representative thereof incurred in any action to enforce such person's
right to receive a benefit under the Plan.
(b) In the event of a Change in Control, the Company shall establish a
trust for the benefit of Participants and persons claiming through them
which shall be funded in an initial amount of $1,000,000 from which the
Committee shall, according to reasonable rules that the Committee shall
establish, pay the legal fees and expenses incurred by any Participant,
Beneficiary or legal
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representative thereof in enforcing his rights under the Plan. The
Company shall contribute such additional sums to such trust as shall be
necessary to pay such legal fees and expenses.
17. LAW GOVERNING THE PLAN. Except to the extent federal law applies, the Plan
shall be governed by the laws of the State of New Jersey without giving
effect to principles of conflicts of law.
18. MISCELLANEOUS.
(a) The masculine pronoun shall mean the feminine wherever appropriate.
(b) The headings are for convenience only. In the event of a conflict
between the headings of a paragraph and its contents, the contents shall
control.
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