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EXHIBIT 10-10
FOURTH RESTATEMENT OF
THE RETIREMENT REPARATION PLAN
FOR CERTAIN EMPLOYEES OF
THE DETROIT EDISON COMPANY
The Retirement Reparation Plan for Certain Employees of The Detroit Edison
Company (the "Plan"), established by The Detroit Edison Company (the "Company")
effective January 1, 1989, as amended and restated effective May 22, 1989, June
26, 1995, and January 1, 1996, is hereby amended and restated as of October 27,
1997 by this Fourth Restatement.
SECTION 1 - PURPOSE
The sole purpose of this Plan is to assure that all eligible persons who become
eligible to and do receive benefits under the Employees' Retirement Plan of The
Detroit Edison Company (the "Retirement Plan") will receive the same aggregate
dollar amount of benefits (after taking into account any benefits such persons
are eligible to receive under the Benefit Equalization Plan for Certain
Employees of The Detroit Edison Company (the "BEP")) as they would have received
under the Retirement Plan, but for the limitations on contributions and benefits
imposed from time to time by the compensation limitation of Section 401(a)(17)
of the Internal Revenue Code, whether such limitations result solely from the
application of Section 401(a)(17) of the Internal Revenue Code or result from
the combination of the application of Section 401(a)(17) of the Internal Revenue
Code and the application of the limitations on contributions and benefits
imposed from time to time by Section 415 of the Internal Revenue Code. This Plan
is not intended to and shall not be construed so as to provide any person
receiving benefits under the Retirement Plan, the BEP, if applicable, and this
Plan, if applicable, with benefits in the aggregate which are either larger or
smaller than the benefit which would result from the calculation made under the
applicable provisions of the Retirement Plan, and the BEP, if applicable,
without giving effect to or recognition of the contribution and benefit
limitation provisions of Section 401(a) (17) of the Internal Revenue Code,
whether such limitations result solely from the application of Section
401(a)(17) of the Internal Revenue Code or result from the combination of the
application of Section 401(a)(17) of the Internal Revenue Code and the
application of the limitations on contributions and benefits under Section 415
of the Internal Revenue Code. The benefit provided under this Plan to any person
shall be separate from and in addition to any benefit provided under the
Retirement Plan, the BEP, if applicable, and any other plan or program
maintained by the Company.
SECTION 2 - ELIGIBILITY
Each retired employee of the Company and, as applicable, the spouse or
beneficiary of a former Company employee whose benefits under the Retirement
Plan are limited by the provisions set forth therein to conform to Section
401(a)(17) of the Internal Revenue
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Code shall be eligible for the benefits provided by this Plan. In no
event shall a person who is not entitled to benefits under the Retirement
Plan be eligible for any benefits under this Plan.
SECTION 3 - AMOUNT OF BENEFITS
The benefits payable under this Plan shall equal the excess, if any, of:
(a) the aggregate benefits which would have been paid to such retired
employee, an employee's spouse or beneficiary under the Retirement Plan
and the BEP, if applicable, if the provisions of such plans were
administered and benefits paid without regard to either the limitations
on contributions and benefits imposed by the compensation limitation of
Section 401(a)(17) of the Internal Revenue Code, or the special benefit
limitations added to the Retirement Plan to conform it to Section 415
of the Internal Revenue Code, over
(b) the aggregate benefits which are payable to such retired employee, an
employee's spouse or beneficiary under the Retirement Plan and the BEP,
if applicable.
SECTION 4 - PAYMENT OF BENEFITS
(a) Payment of benefits under this Plan shall be made coincident with the
payment of benefits under the Retirement Plan or as soon as practicable
thereafter.
(b) In the event an employee receives an assessment of income taxes from
the Internal Revenue Service which treats any amount payable under this
Plan as being includible in such employee's gross income prior to the
actual payment of such amount to such employee, the Company shall pay
an amount equal to such income taxes to the employee within 30 days
after written notice from such employee of such assessment. The amount
of income taxes paid to the employee hereunder shall be considered an
advance of and shall reduce the benefits ultimately paid to the
employee under this Plan.
(c) Each payment under this Plan shall be reduced by any federal,
state, or local taxes which the Detroit Edison Company determines
should be withheld from such payment.
(d) Benefits under this Plan shall be payable to or in respect of a
Company's former employees solely from the general assets of such
Company; provided, however, that no provision of the Plan shall
preclude a Company from segregating assets which are intended to be a
source for payment of benefits under the Plan. Each participant in this
Plan shall have the status of an unsecured creditor of the Company.
This Plan constitutes a promise by the Company to make benefit payments
in the future. It is intended that this Plan be unfunded for tax
purposes and for purposes of Title I of ERISA and that this Plan shall
remain unfunded
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during the entire period of its existence. 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. The employee, employee's spouse or
beneficiary is merely a general creditor of the Company and the obligation of
the Company 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 hereunder shall not be anticipated, alienated, sold, assigned,
transferred, pledged, encumbered, attached, or garnished by an employee, an
employee's spouse or beneficiary, or creditors of an employee and shall not be
subject to garnishment, execution, attachment, or similar process. Any attempted
anticipation, sale, assignment, transfer, pledge, levy, encumbrance, attachment,
garnishment or similar process shall be null and void and without effect.
SECTION 6 - ADMINISTRATION; ARBITRATION
(a) This Plan shall be administered by the Organization and Compensation
Committee of the Board of Directors (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
and application of this Plan made prior to a Change in Control, as
defined in Addendum I, 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
Retirement Plan, the BEP and any other plan or program maintained by
the Company.
(c) For purposes of the Plan, "Company" shall mean The Detroit Edison
Company and any Controlled Group Member which has adopted the Plan with
the approval of the Chairman of the Board of Directors and the Chairman
of the board of directors of the Controlled Group Member. As a
condition to participating in the Plan, such Controlled Group Member
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
any former employee or spouse or beneficiary thereof, the term
"Company" shall mean The Detroit Edison Company or such other
Controlled Group Member who employed the employee. Unless otherwise
defined herein, all defined terms shall have the same meaning as
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provided under the Retirement Plan. All corporate officers and other
administrative personnel referred to herein refer to officers and
administrative personnel of The Detroit Edison 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 Company 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.
(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 be borne by
the Company. Neither the Company nor such employee
shall be entitled to attorneys' fees, expert witness
fees, or any 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.
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(6) The arbitration provisions shall, with respect to any
Grievance, survive the termination of this Plan.
SECTION 7 - AMENDMENT AND DISCONTINUANCE
The Detroit Edison Company expects to continue this Plan indefinitely, but
reserves the right to amend or discontinue it. The Vice President, Human
Resources, or, should the Vice President, Human Resources, become a Participant
in this Plan, the Manager, Human 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 Company 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, and no amendment, discontinuance, withdrawal from or
termination of the Plan shall adversely affect the rights of any person to any
such accrued benefits without such person's prior written consent. Any
Controlled Group Member which has adopted the Plan 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
Company, the Plan shall terminate as to such Company unless the Plan is
continued by a successor thereto (subject to the consent of the Chairman of the
Board of Directors).
SECTION 8 - CHANGE-IN-CONTROL BENEFIT FOR CERTAIN PERSONS
Notwithstanding the foregoing provisions of the Plan, an employee who has
entered into a Change-in-Control Severance Agreement with DTE Energy Company
("Change-in-Control Severance Agreement") shall receive a benefit as provided in
Addendum I to the Plan upon termination of employment in certain circumstances
following a Change in Control, as defined in Addendum I. In addition, any former
employee, spouse or beneficiary receiving a benefit under the Plan at the time
of the occurrence of a Change in Control, as defined in Addendum I, shall
receive payment as provided in Addendum I. If a benefit is payable to any
employee or former employee, spouse or beneficiary pursuant to Addendum I,
neither the employee or former employee or any spouse or beneficiary thereof,
shall be entitled to any payments or further payments, as the case may be, under
the foregoing provisions of the Plan.
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ADDENDUM I
CHANGE-IN-CONTROL BENEFITS
A change in control ("Change in Control") for purposes of the
Plan and this Addendum I shall have occurred if at any time on or after October
1, 1997 any of the following events shall occur:
(1) DTE Energy Company ("DTE") is merged, consolidated or
reorganized into or with another corporation or other legal
person, and as a result of such merger, consolidation or
reorganization less than 55% of the combined voting power of
the then-outstanding securities of such corporation or person
immediately after such transaction is held in the aggregate by
the holders of the then-outstanding securities entitled to
vote generally in the election of directors (the "Voting
Stock") of DTE immediately prior to such transaction;
(2) DTE sells or otherwise transfers all or substantially all of
its assets to another corporation or other legal person, and
as a result of such sale or transfer, less 55% of the combined
voting power of the then-outstanding Voting Stock of such
corporation or person immediately after such sale or transfer
is held in the aggregate (directly or through ownership of
Voting Stock of DTE or a Subsidiary (as hereinafter defined))
by the holders of Voting Stock of DTE immediately prior to
such sale or transfer;
(3) There is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated under the Exchange
Act) of securities representing 20% or more of the combined
voting power of the then-outstanding Voting Stock of DTE;
(4) If, during any period of two consecutive years, individuals
who at the beginning of any such period constitute the
directors of DTE cease for any reason to constitute at least a
majority thereof; provided, however, that for purposes of this
paragraph (4) each director who is first elected, or first
nominated for election, by DTE's stockholders, by a vote of at
least two-thirds of the directors
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of DTE (or a committtee thereof) then still in office who
were directors of DTE at the beginning of any such period
will be deemed to have been a director of DTE at the
beginning of such period; or
(5) The approval of the shareholders of DTE of a complete
liquidation or dissolution of DTE.
Notwithstanding the foregoing provisions of paragraph (3)
above, unless otherwise determined in a specific case by
majority vote of the Board of Directors of DTE, a "Change in
Control" shall not be deemed to have occurred for purposes of
paragraph (3) solely because (i) DTE, (ii) an entity in which
DTE directly or indirectly beneficially owns 50% or more of
the outstanding Voting Stock (a "Subsidiary"), or (iii) any
DTE-sponsored employee stock ownership plan or any other
employee benefit plan of DTE or any Subsidiary either files or
becomes obligated to file a report or a proxy statement under
or in response to Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report or item therein) under the
Exchange Act disclosing beneficial ownership by it of shares
of Voting Stock, whether in excess of 20% or otherwise.
In the event a Change in Control occurs, any former employee,
spouse or beneficiary thereof who as of the date of the occurrence of the Change
in Control is receiving benefits under the Plan shall be paid in cash in a lump
sum an amount equal to the actuarial equivalent present value of the remaining
benefits, determined as of the date of payment, that are payable to or in
respect of such person under the Plan (including survivor benefits, if
applicable).
In the event a Change in Control occurs, any employee who has
entered into a Change-in-Control Severance Agreement and whose employment is
terminated after the occurrence of the Change in Control in circumstances
entitling the individual to severance compensation under Section 4 of the
Change-in-Control Severance Agreement shall be entitled to a cash lump sum
payment under the Plan. The amount of lump sum payment payable hereunder shall
be equal to the actuarial equivalent present value of the benefit that would
otherwise be payable to the employee under the Plan determined as otherwise
provided in the Plan.
Upon the foregoing payment, no further benefits shall be
payable under the Plan to such employee or former employee, spouse or
beneficiary thereof. Payments under this Addendum I shall be made within 30 days
after the date on which the Change in Control occurs or, if later, the date the
employee terminates employment.
For purposes of this Addendum I, the interest/discount rate
and mortality
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table used to determine actuarial equivalence shall be as follows:
(1) Interest/discount Rate - an annual rate equal to the
Fed's Fund Rate (as of the first business day of the
calendar month in which the Change in Control or
termination, if later, occurs) plus 1%, but in no
event shall the interest/discount rate exceed 8% or
be less than 5%.
(2) Mortality Table - the unisex version of the mortality
table used for funding purposes of the most recent
actuarial valuation for the Plan issued prior to the
date of the Change in Control as defined in the DTE
Change-in-Control Severance Agreements.
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