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EXHIBIT 10-4
FOURTH RESTATEMENT OF
THE DETROIT EDISON COMPANY
SAVINGS REPARATION PLAN
The Detroit Edison Company Savings Reparation Plan (the "Plan"), established by
The Detroit Edison Company (the "Company") effective May 22, 1989, as amended
and restated effective June 27, 1994, June 26, 1995, and January 1, 1996 is
hereby amended and restated as of April 29, 1996, by this Fourth Restatement.
SECTION 1 - PURPOSE
The purpose of this Plan is to offer a retirement savings alternative for those
eligible executives whose permissible contributions to The Detroit Edison
Company Savings & Investment Plan (hereinafter the "Savings & Investment Plan"
and "Plan") are subject to the compensation limitation of Section 401(a)(17) of
the Internal Revenue Code. The benefits provided under this Plan to any
individual shall be separate from and in addition to any benefit provided under
the Savings & Investment Plan and any other plan or program maintained by the
Company. The amount of benefit under this Plan is to be determined solely in
accordance with Section 4 hereof and is not dependent or conditioned on
participation in the Savings & Investment Plan. Therefore, this Plan is not
intended to and shall not be construed so as to provide the same
dollar-for-dollar benefit as a participant would have received under the
Savings & Investment Plan if contributions had not been limited by Section
401(a)(17), nor is this Plan intended to compensate an employee for the benefit
loss which results if the employee elects not to participate in the Savings &
Investment Plan to the full extent permitted thereunder.
SECTION 2 - ELIGIBILITY
Employees of an Employer whose benefits under the Savings & Investment Plan are
subject to limitation by the provisions set forth therein to conform to Section
401(a)(17) of the Internal Revenue Code shall be eligible to elect to
participate and receive the benefits provided under this Plan. However, if an
eligible employee hereunder obtains a hardship distribution under the Savings &
Investment Plan, his or her right to elect to participate hereunder shall be
suspended for twelve months after receipt of the hardship distribution. In no
event shall a person who is not eligible to participate in the Savings &
Investment Plan be eligible to elect to participate and receive the benefits
provided under this Plan.
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SECTION 3 - PARTICIPATION AND AMOUNT OF BENEFITS
(a) Any employee who is eligible to elect to receive the benefits provided
under this Plan may participate in this Plan by irrevocably electing to
defer 1% to 15% of his or her Basic Compensation, as defined in the
Savings & Investment Plan, in excess of the compensation limitations of
Section 401(a)(17) of the Internal Revenue Code. Deferrals must be made in
whole percents. The amount by which an employee's Basic Compensation
exceeds the compensation limitations of Section 401(a)(17) shall
hereinafter be referred to as "excess basic compensation". The amount of
compensation which the employee defers hereunder shall hereinafter be
referred to as "deferred excess basic compensation".
An election to defer a percentage of excess basic compensation will
become effective on January 1 of the calendar year subsequent to the
calendar year during which the election is received by the Administrator.
An election to defer a percentage of excess basic compensation will
remain in effect until an election to change the percentage of excess
basic compensation deferred or a revocation of the election becomes
effective. An election to change the percentage of excess basic
compensation deferred or a revocation of an election to defer a
percentage of excess basic compensation will become effective on January
1 of the calendar year subsequent to the calendar year during which the
election to change the percentage of excess basic compensation deferred
or the revocation of the election is received by the Administrator.
All elections and revocations of elections must be made on forms provided
by the Company and will become effective only after they are received by
the Administrator. In no event shall an employee be permitted to elect to
defer excess basic compensation, to elect to change the percentage of
excess basic compensation deferred, or to revoke an election to defer
excess basic compensation which has already been earned by the employee.
The actual deferral of deferred excess basic compensation will not
commence until the employee compensation to date for the calendar year
exceeds the compensation limitation of Section 401(a)(17) of the Internal
Revenue Code.
Notwithstanding the foregoing, in the first plan year in which a
participant becomes eligible to participate in this Plan, the participant
may make an election to defer a percentage of excess basic compensation
for services to be performed subsequent to the election within 30 days
after the employee becomes eligible to participate in this Plan. Such
election shall be effective with the pay period commencing immediately
after the election is timely received by the Administrator.
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(b) An employee's deferred excess basic compensation will be deemed to be
invested in an investment option(s) available to employees under the
Savings & Investment Plan. Currently, the Savings & Investment Plan allows
participants to invest in the funds listed below:
(a) Fidelity Retirement Money Market Portfolio
(b) Fidelity Intermediate Bond Fund
(c) Fidelity Asset Manager
(d) Fidelity U.S. Equity Index Portfolio
(e) Fidelity Growth & Income Portfolio
(f) Fidelity Magellan Fund
(g) Fidelity ContraFund
(h) Fidelity OTC Portfolio
(i) Fidelity Overseas Fund
(j) DTE Energy Common Stock Fund
As part of the employee election to defer excess basic compensation, the
employee shall make an investment designation, which shall indicate (1)
the investment option(s) in which the employee deferred excess basic
compensation will be deemed to be invested each month and (2) the
percentage of deferred excess basic compensation to be deemed to be
invested in each of the investment options selected each month. The
distribution may be 100 percent in one fund, or divided among any
combination of the ten funds in multiples of 10 percent, as long as the
combination of deemed fund investments equals 100 percent.
Notwithstanding the foregoing, the Employer matching contribution
credited to an employee's account each month, pursuant to paragraph (c)
of Section 3 of this Plan, will always be deemed to be invested entirely
in the DTE Energy Common Stock Fund.
If a change in investment options available to participants in the
Savings & Investment Plan eliminates an investment option previously
selected by a participating employee hereunder as part of his or her
deemed investment option, the amount of deferred excess basic
compensation which is deemed to be invested (including earnings, if any,
deemed to be applicable) in the discontinued investment option on the
last business day of the month immediately preceding the date that it is
discontinued shall be deemed to be transferred to participating units in
the DTE Energy Common Stock Fund valued as of the last business day of
the month immediately preceding the effective date of the investment
option's discontinuance unless, in the opinion of the Savings &
Investment Plan Committee (as defined in the Savings & Investment Plan)
it is determined that the discontinued investment option has
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been replaced by an equivalent investment option. In this case, the
amount of the employee's excess basic compensation that is deemed to be
invested in the discontinued investment option shall be transferred to
the equivalent investment option at the time such investment option is
discontinued and all additional deferred excess basic compensation that
the employee elected to be deemed to be invested in the discontinued
investment option shall be deemed to be invested in the investment option
determined to be equivalent by the Savings & Investment Plan Committee.
In the event that the Savings & Investment Plan Committee has not
determined that there is an equivalent investment option with respect to
the discontinued investment option, then all additional deferred excess
basic compensation that the employee elected to be deemed to be invested
in the discontinued investment option shall be deemed to be invested in
the DTE Energy Common Stock Fund and such deemed investment shall
continue until the effective date of a change in investment designation
which is received by the Administrator pursuant to Section 3(d).
The aforementioned deemed investment options available hereunder are
merely intended to serve as tools to measure the value of the amount to
be paid to the employee under Section 4 of this Plan. They are not
intended to and shall not be construed to require the Employer to make
actual investments of the type anticipated by the deemed investment
option selected by the employee. If and to the extent the Employer
chooses to actually invest in the investment option selected by the
employee, any assets acquired by the Employer shall remain the sole
property of the Employer subject to the claims of its general creditors
and shall not be deemed to form part of the employee account.
Notwithstanding anything herein to the contrary, in no event shall
anything be done under this Plan by reference to the Savings & Investment
Plan which would cause any participating employee to be in constructive
receipt of amounts credited to his or her account under this Plan.
(c) An unfunded bookkeeping account will be established and maintained for
each participating employee which shall be credited with the employee's
deferred excess basic compensation paid as of the last business day of
each month. In addition, as of the last business day of the month, the
Company will credit an amount to the employee's account equal to one
dollar for each dollar the employee defers of up to four percent of his or
her excess basic compensation and fifty cents for each dollar the employee
defers of up to the next four percent of his or her excess basic
compensation for that month. The employee's contribution for that month
will be converted into participating units/shares equivalent in value to
the corresponding participating units/shares on the last business day of
that month in the Savings & Investment Plan investment option(s) which
have been designated by the employee as his or her deemed investment
option(s). In the case of the Employer's matching contributions,
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the amount attributable to that month shall be converted into
participating units equivalent in value to participating units on the
last business day of that month in the Savings & Investment Plan DTE
Energy Common Stock Fund. The number of participating units/shares
(rounded to the nearest hundredth) will be determined by dividing the
total amount credited to the employee's account for the month, which is
deemed to be invested in an investment option, by the actual value of a
participating unit/share in that investment option under the Savings &
Investment Plan. The value of the applicable participating unit/share in
the Savings & Investment Plan investment option shall be determined on
the last business day of the month during which the deferred excess basic
compensation to be converted has been credited to the employee's account.
Unless otherwise specified herein, the valuation of the employee's
unfunded bookkeeping account will follow the procedures utilized by the
Savings & Investment Plan Trustee in determining the valuation of
contributions and investments in the Savings & Investment Plan.
(d) Subject to the procedures identified in Section 3(b) hereof, an
investment designation made by an employee will remain in effect until
changed by the employee. The employee may change his or her investment
designation by giving written notice to the Administrator on a form
provided for such purpose. A change of an investment designation may be
made once each calendar quarter. The participant must designate whether
the change applies (1) to amounts already credited to the participant's
account, (2) to the participant's future contributions to the Plan or (3)
to the amounts already credited to the participant's account and to the
participant's future contributions to the Plan. A change of an investment
designation shall be effective on the last business day of the month
during which written notice of such change is received by the
Administrator.
SECTION 4 - PAYMENT OF BENEFITS
(a) An employee's unfunded bookkeeping account will be valued upon
termination of employment with the Employer and all Affiliates. The
account value will be determined by multiplying the number of
participating units/shares in the employee account relative to each
investment option in which the employee deferred excess basic compensation
and the Employer's matching contribution have been deemed to have been
invested by the value of a participating unit/share in the applicable
investment option of the Savings & Investment Plan in which the deferred
excess basic compensation and the Employer's matching contribution have
been deemed to have been invested. The value of the participating
units/shares in this Plan shall be determined on the business day
preceding the day on which termination of employment occurs. The account
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will be distributed to the employee in one lump-sum payment as soon as
practicable, but no later than 30 days, after the employee's termination
of employment.
(b) In the event that an employee receives an assessment of income taxes from
the Internal Revenue Service which treats any amount in the employee's
unfunded bookkeeping account as being includible in such employee's gross
income prior to actual payment under Section 4(a) hereof, the Employer
shall pay an amount equal to such income taxes to such employee within
thirty days after the Company receives written notice from such employee
of such assessment, and such employee's unfunded bookkeeping account shall
be reduced by an amount equal to such income taxes.
(c) Each payment under the Plan shall be reduced by any federal, state, or
local income taxes which the Company determines should be withheld from
such payment.
(d) An employee may name any beneficiary or beneficiaries (subject to
restrictions imposed by law, if any) to whom amounts credited to his or
her account under this Plan are to be paid in case of the employee's death
before the employee receives all amounts credited to his or her account.
Each designation will revoke all prior designations by the employee, shall
be on a form prescribed by the Company and will be effective only when
received by the Administrator. In the absence of any such designation, the
unpaid amount in an employee's account at the time of the employee's death
shall be paid to the employee's estate.
(e) An employee will not be permitted to defer excess basic compensation and
will not be credited with the Employer's matching contribution for a month
unless he or she is employed by the Employer on the last business day of
the month. Therefore, if an employee terminates employment with the
Employer prior to the last business day of the month, the employee shall
receive what would have been that month's deferred excess basic
compensation in his or her final paycheck and will not receive any
matching contribution from the Employer for the month of termination of
employment.
(f) The amount of each employee's excess basic compensation which he or she
elects to defer under the plan shall be deemed to be compensation for the
purpose of calculating the amount of an employee's benefits or
contributions under a pension or a retirement plan qualified under Section
401(a) of the Internal Revenue Code, and under any non-qualified deferred
compensation
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arrangements maintained by the Employer except to the extent specifically
provided to the contrary in any such plan.
(g) Benefits under this Plan shall be payable to or in respect of an
Employer's former employees solely from the general assets of such
Employer; provided, however, that no provisions of the Plan shall preclude
an Employer from segregating assets which are intended to be a source for
payment of benefits under the Plan. The Plan shall remain unfunded during
the entire period of its existence for purposes of the Federal income tax
laws and Title I of ERISA. The Company intends that this Plan be
maintained primarily for a select group of management or highly
compensated employees.
SECTION 5 - RIGHTS OF EMPLOYEES
Except to the extent provided in Section 7 herein below, no employee or an
employee's spouse or beneficiary shall at any time have any vested right to
receive the benefits provided by this Plan. An employee, employee's spouse or
beneficiary shall not have any interest in the deferred excess basic
compensation or monthly award credited to his or her unfunded bookkeeping
account until such account is distributed in accordance with the Plan. All
deferred excess basic compensation and any other amounts otherwise credited to
the unfunded bookkeeping account of an employee under the Plan shall remain the
sole property of the Employer, subject to the claims of its general creditors
and available for its use for whatever purposes are desired. The employee,
employee's spouse or beneficiary is merely a general unsecured creditor of the
Employer and the obligation of the Employer hereunder is purely contractual and
shall not be funded or secured in any way.
The right of an employee, employee's spouse or beneficiary to payment of any
benefit or deferred compensation hereunder shall not be alienated, assigned,
transferred, pledged or encumbered and shall not be subject to execution,
attachment or similar process. No employee may borrow against the unfunded
bookkeeping account established for his or her benefit hereunder. No account
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, whether voluntary or involuntary, including but not limited to any
liability which is for alimony or other payments for the support of a spouse or
former spouse, or for any other relative of any employee. Any attempted
assignment, pledge, levy or similar process shall be null and void and without
effect.
Employees who participate in this Plan assume the risks associated with
fluctuations in the value of all deemed investment options, including the
Fidelity Retirement Money Market Portfolio, Fidelity Intermediate Bond Fund,
Fidelity Asset Manager, Fidelity
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U.S. Equity Index Portfolio, Fidelity Growth & Income Portfolio, Fidelity
Magellan Fund, Fidelity ContraFund, Fidelity OTC Portfolio, Fidelity Overseas
Fund, and DTE Energy Common Stock Fund.
SECTION 6 - ADMINISTRATION; ARBITRATION
(a) This Plan shall be administered by the Director of Benefit Plan
Administration of the Company (the "Administrator") as an unfunded plan
which is not intended to meet the qualification requirements of Section
401 of the Internal Revenue Code. The Administrator's decisions in all
matters involving the interpretation, application and administration of
this Plan shall be conclusive.
(b) The Plan shall at all times be maintained by the Company and administered
by the Administrator as a plan wholly separate from the Savings &
Investment Plan, and any other plan or program maintained by the Company.
(c) For purposes of the Plan, "Employer" shall mean the Company and any
Affiliate which has adopted the Plan with the approval of the Chairman of
the Board of Directors and Chairman of the board of directors of the
Affiliate (such an Affiliate is referred to hereinafter as a
"Participating Affiliate"). As a condition to participating in the Plan,
such Affiliate shall authorize the Chairman of the Board of Directors and
the Administrator to act for it in all matters arising under the Plan and
shall agree to comply with such other terms and conditions as may be
imposed by the Chairman of the Board of Directors. Where the context
requires in respect of the liability for the payment of any benefit to an
employee or beneficiary thereof, the term "Employer" shall mean the
Employer employing or who employed such employee. Unless otherwise
defined herein, all defined terms shall have the same meaning as provided
under the Savings & Investment Plan. All corporate officers and other
administrative personnel referred to herein refer to officers and
administrative personnel of the Company.
(d) Notwithstanding Section 6(a) hereof, in the event of any dispute, claim,
or controversy (hereinafter referred to as a "Grievance") between an
employee who is eligible to elect to receive the benefits provided under
this Plan and the Employer with respect to the payment of benefits to such
employee under this Plan, the computation of benefits under this Plan, or
any of the terms and conditions of this Plan, such Grievance shall be
resolved by arbitration in accordance with this Section 6(d).
(1) Arbitration shall be the sole and exclusive remedy to redress
any Grievance.
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(2) The arbitration decision shall be final and binding, and a
judgment on the arbitration award may be entered in any
court of competent jurisdiction and enforcement may be had
according to its terms.
(3) The arbitration shall be conducted by the American
Arbitration Association with the Commercial Arbitration Rules
of the American Arbitration Association and expenses of the
arbitrators and the American Arbitration Association shall
borne by the Company. Neither the Company nor such employee
shall be entitled to attorneys' fees, expert witness fees, or
other expenses expended in the course of such arbitration or
the enforcement of any award rendered thereunder.
(4) The place of the arbitration shall be the offices of the
American Arbitration Association in the Detroit Metropolitan
area, Michigan.
(5) The arbitrator(s) shall not have the jurisdiction or
authority to change any of the provisions of this Plan by
alteration of, addition to, or subtraction from
the terms thereof. The arbitrator(s)' sole authority shall
be to apply any terms and conditions of this Plan. Since
arbitration is the exclusive remedy with respect to any
Grievance, no employee eligible to receive benefits provided
under this Plan has the right to resort to any federal court,
state court, local court, or administrative agency concerning
breaches of any terms and provisions hereunder, and the
decision of the arbitrator(s) shall be a complete defense to
any suit, action, or proceeding instituted in any federal
court, state court, local court, or administrative agency by
such employee or the Company with respect to any Grievance
which is arbitrable as herein set forth.
(6) The arbitration provisions shall, with respect to any
Grievance, survive the termination of this Plan.
SECTION 7 - AMENDMENT AND DISCONTINUANCE
The Company expects to continue this Plan indefinitely, but reserves the right
to amend or discontinue the Plan. The Vice President - Human Resources, or,
should the Vice President - Human Resources become a Participant in this Plan,
the Manager - Human
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Resources Operations, shall review the Plan from time to time and as part of
such review is hereby directed and authorized to amend such Plan to the
extent necessary for ease of administration and/or to comply with applicable
federal and state laws. If the Plan should be amended or discontinued, the
Employer shall be liable for any benefits that have accrued under this Plan
(determined on the basis of each employee's presumed termination of employment
as of the date of such amendment or discontinuance) as of the date of such
action.
Any Participating Affiliate may as to itself withdraw from the Plan at any time
by action of the Chairman of its board of directors. In the event of the
dissolution, merger, consolidation or reorganization of a Participating
Affiliate, the Plan shall terminate as to such Participating Affiliate unless
the Plan is continued by a successor thereto (subject to the consent of the
Chairman of the Board of Directors).
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