EXHIBIT 10-4
EXELON CORPORATION RETIREMENT PROGRAM
Effective December 31, 2001
EXELON CORPORATION RETIREMENT PROGRAM
INTRODUCTION
The title of this Plan shall be the "Exelon Corporation Retirement
Program." This Plan is an amendment and restatement of the Commonwealth Edison
Company Service Annuity System as in effect on December 30, 2001 and reflects
the merger of the Service Annuity Plan of PECO Energy Company into the Plan
effective December 31, 2001. This amendment and restatement, except as otherwise
provided, shall apply to Employees whose employment is terminated on or after
December 31, 2001 and to the surviving spouses and surviving dependent children
of such Employees. The rights and benefits of Employees whose employment
terminates before December 31, 2001 and of the surviving spouses and surviving
dependent children of such Employees shall be determined under the Plan as in
effect at the time of such Employees' termination, including any provisions of
this Plan effective at such time.
Subject to the foregoing, individuals who are "Participants" as
defined in the document designated as the Commonwealth Edison Company Service
Annuity System and attached hereto as Appendix A shall have their benefit under
the Plan determined exclusively by the terms of Appendix A hereto. Individuals
who are "Participants" as defined in the document designated as the Service
Annuity Plan of PECO Energy Company and attached hereto as Appendix B shall have
their benefit under the Plan determined exclusively by the terms of Appendix B
hereto.
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EXHIBIT 10-4 APPENDIX A
COMMONWEALTH EDISON COMPANY
SERVICE ANNUITY SYSTEM
(Amended and Restated as of April 1, 1995)*
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* Working Copy reflecting Amendments 1 through 8.
TABLE OF CONTENTS
Page
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ARTICLE 1 ESTABLISHMENT AND PURPOSE ........................................................................... 1
ARTICLE 2 DEFINITIONS ......................................................................................... 1
Section 2.1. Defined Terms ..................................................................................... 1
Section 2.2. Gender and Plurals ................................................................................ 10
ARTICLE 3 PARTICIPATION ....................................................................................... 10
Section 3.1. Employees Represented by IBEW Local Union 15 ...................................................... 10
Section 3.2. Management Employees .............................................................................. 11
Section 3.3. Cessation of Participation ........................................................................ 12
ARTICLE 4 CONTRIBUTIONS ....................................................................................... 13
Section 4.1. Amount of Contributions ........................................................................... 13
Section 4.2. Return of Contributions ........................................................................... 13
ARTICLE 5 SERVICE ANNUITIES ................................................................................... 14
Section 5.1. Description of Service Annuities .................................................................. 14
Section 5.2. Normal and Deferred Retirement .................................................................... 15
Section 5.3. Early Retirement .................................................................................. 18
Section 5.4. Disability Retirement at or After Age 45 .......................................................... 19
Section 5.5. Disability Retirement Before Age 45 ............................................................... 21
Section 5.6. Federal Benefit Supplemental Payments Prior to Age 65 ............................................. 23
Section 5.7. Deferred Vested Termination ....................................................................... 24
Section 5.8. Special Rules Applicable to the Computation of Service Annuities .................................. 25
Section 5.9. Post Retirement Adjustments ....................................................................... 29
ARTICLE 6 SERVICE ANNUITY FORMS ............................................................................... 33
Section 6.1. Basic Service Annuity Form ........................................................................ 33
Section 6.2. Optional Service Annuity Forms .................................................................... 34
Section 6.3. Pre-retirement Surviving Spouse Benefit ........................................................... 35
Section 6.4. Pre-retirement Surviving Child Benefits ........................................................... 39
Section 6.5. Death Benefits for Spouse or Child of Participant Who Dies During Employment After Age 65 ......... 40
Section 6.6. Election Procedure ................................................................................ 41
Section 6.7. Lump-Sum Payments ................................................................................. 45
Section 6.8. Distributions to Dependent Minor and Disabled Children ............................................ 46
ARTICLE 7 LIMITATIONS ON BENEFITS ............................................................................. 46
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Section 7.1. Maximum Annual Benefits ........................................................................... 46
Section 7.2. Temporary Restrictions on Benefits in Case of Termination or Curtailment .......................... 49
ARTICLE 8 SERVICE ANNUITY FUND ................................................................................ 51
ARTICLE 9 SPECIAL RULES RELATING TO PARTICIPATION OF AND DISTRIBUTION TO CERTAIN TERMINATED EMPLOYEES ......... 52
Section 9.1. Employment After Commencement of Service Annuity .................................................. 52
Section 9.2. Social Security Increases ......................................................................... 53
Section 9.3. Leased Employees .................................................................................. 53
Section 9.4. Suspension of Service Annuities for Participants who Remain Employed After Normal Retirement Age .. 54
Section 9.5. Reemployment Before Commencement of Service Annuity ............................................... 54
Section 9.6. Employees whose Representation by IBEW Local Union 15 Changes ..................................... 57
Section 9.7. Transfer of Employment to or Reemployment in Positions Eligible for Participation in the Plan
or the Service Annuity Plan of PECO Energy Company by Certain Individuals Who Were Participants
in Such a Plan on December 31, 2000 ............................................................... 57
ARTICLE 10 ADMINISTRATION ...................................................................................... 58
Section 10.1. The Committee .................................................................................... 58
Section 10.2. Claims Procedure ................................................................................. 61
Section 10.3. Procedures for Domestic Relations Orders ......................................................... 63
Section 10.4. Computation of Benefits .......................................................................... 64
Section 10.5. Actuary to Be Employed ........................................................................... 65
Section 10.6. Funding Policy ................................................................................... 65
Section 10.7. Notices to Participants, Etc ..................................................................... 65
Section 10.8. Notices to Employers or Committee ................................................................ 65
Section 10.9. Records .......................................................................................... 66
Section 10.10. Responsibility to Advise Committee of Current Address ............................................ 66
ARTICLE 11 PARTICIPATION BY OTHER EMPLOYERS .................................................................... 66
Section 11.1. Adoption of Plan ................................................................................. 66
Section 11.2. Withdrawal from Participation .................................................................... 67
Section 11.3. Company and Committee Agent for Employers ........................................................ 67
ARTICLE 12 CONTINUANCE BY A SUCCESSOR .......................................................................... 67
ARTICLE 13 MISCELLANEOUS ....................................................................................... 68
Section 13.1. Expenses ......................................................................................... 68
Section 13.2. Non-Assignability ................................................................................ 69
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Section 13.3. Employment Non-Contractual ....................................................................... 71
Section 13.4. Limitation of Rights ............................................................................. 71
Section 13.5. Merger or Consolidation with or Transfer to Another Plan ......................................... 71
Section 13.6. Medical Examination .............................................................................. 74
ARTICLE 14 TOP-HEAVY PLAN REQUIREMENTS ......................................................................... 74
Section 14.1. Top-Heavy Plan Determination ..................................................................... 74
Section 14.2. Minimum Benefit for Top-Heavy Years .............................................................. 76
Section 14.3. Top-Heavy Vesting Requirements ................................................................... 77
Section 14.4. Special Rules for Applying Statutory Limitations on Benefits ..................................... 78
ARTICLE 15 AMENDMENT AND TERMINATION ........................................................................... 78
Section 15.1. Amendment ........................................................................................ 78
Section 15.2. Establishment of Separate Plan ................................................................... 79
Section 15.3. Termination of the Plan by an Employer ........................................................... 79
Section 15.4. Distribution upon Termination or Partial Termination ............................................. 80
Section 15.5. Trust to Be Applied Exclusively for Participants and Their Beneficiaries ......................... 80
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COMMONWEALTH EDISON COMPANY
SERVICE ANNUITY SYSTEM
ARTICLE 1
ESTABLISHMENT AND PURPOSE
The title of this Plan shall be the "Commonwealth Edison Company
Service Annuity System". This Plan is an amendment and restatement of the
Commonwealth Edison Company Service Annuity System as in effect on March 31,
1995 and, except as otherwise provided, shall apply to Employees whose
employment is terminated on or after April 1, 1995 and to the surviving Spouses
and surviving dependent children of such Employees. The rights and benefits of
Employees whose employment terminates before April 1, 1995 and of the surviving
Spouses and surviving dependent children of such Employees shall be determined
under the Commonwealth Edison Company Service Annuity System as in effect at the
time of such Employees' termination, including any provisions of this Plan
effective at such time.
For purposes of the Plan, the phrase "a member of IBEW Local Union
15" shall mean an employee who is represented by IBEW Local Union 15 and covered
under that certain Collective Bargaining Agreement dated August 25, 1997 to
March 31, 2001 between Commonwealth Edison Company and IBEW Local Union 15, as
such agreement was previously in effect and as it may be amended from time to
time.
ARTICLE 2
DEFINITIONS
Section 2.1. Defined Terms. As used herein the following words and
phrases shall have the following respective meanings when capitalized unless the
context clearly indicates otherwise:
(1) Affiliate. (a) A corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of
the Code) as an Employer, (b) a trade or business (whether or not
incorporated) under common control (within the meaning of Section 414(c)
of the Code) with an Employer, (c) an organization (whether or not
incorporated) that is a member of an affiliated service group (within the
meaning of Section 414(m) of the Code) that includes an Employer, a
corporation described in clause (a) of this subdivision or a trade or
business described in clause (b) of this subdivision, or (d) any other
entity that is required to be aggregated with an Employer pursuant to
Regulations promulgated under Section 414(o) of the Code.
(2) Annuity Starting Date. The first day on which a Service Annuity
is payable to a Participant.
(3) Basic Compensation. A Participant's base pay rate per pay
period, as determined by the Committee. For purposes of the preceding
sentence, a Participant's base pay rate per pay period shall include (i)
any amount contributed by the Participant's Employer on behalf of such
Participant for such year to the Participant's Before-Tax Contributions
Account under the Commonwealth Edison Employee Savings and Investment
Plan, the Commonwealth Edison Benefits Contribution Options or the
Commonwealth Edison Company Key Choices Program and (ii) such other types
of compensation or payments as may be determined by the Committee from
time to time or as may be set forth from time to time in Exhibit 1
attached hereto, and shall exclude (i) bonuses (other than meter readers'
bonuses and any payment for ratification of a collective bargaining
agreement), (ii) overtime pay, (iii) shift premiums and (iv) such other
types of compensation or payments as may be determined by the Committee
from time to time or as may be set forth from time to time in Exhibit 1
attached hereto. In the case of a Participant who is absent from
employment due to either an authorized leave of absence (including a leave
of absence for participation in Military Service) or employment by a union
that represents any group of Employees, Basic Compensation shall mean, for
the period during which the Participant is absent due to an authorized
leave of absence or employment by such union, the Participant's average
base pay rate per pay period for the twelve-month period preceding the
first day of the Participant's authorized leave of absence or employment
by a union, as the case may be. A Participant whose Termination of
Employment occurs on account of a Total and Permanent Disability, but who
is not then eligible for a Service Annuity under Section 5.2 (relating to
normal and deferred retirement), Section 5.3 (relating to early
retirement), Section 5.4 (relating to disability retirement at or after
age 45) or Section 5.5 (relating to disability retirement before age 45)
shall not be treated as having any Basic Compensation for periods of
Credited Service after such Termination of Employment. A Participant whose
Termination of Employment occurs on account of a Total and Permanent
Disability and who is receiving benefits under any Employer's long term
disability plan shall be treated for periods of Credited Service after
such Termination of Employment as having Basic Compensation determined
under Section 5.2(c).
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(4) Beneficiary. A Participant's Spouse or the Participant's
Dependent Minor Child or Dependent Disabled Child entitled, in the event
of the death of the Participant, to receive a Service Annuity, under
Section 6.3 (relating to the pre-retirement surviving spouse benefit),
Section 6.4 (relating to the pre-retirement surviving child benefits) or
Section 6.5 (relating to death benefits with respect to certain
Participants who die during employment and after age 65). To the extent
required by law and where applicable in the Plan, an alternate payee
entitled to receive a Service Annuity under paragraph (b) of Section 13.2
(relating to exception to non-assignability for qualified domestic
relations orders) shall also be a Beneficiary.
(5) Child. A Participant's natural child born prior to the time
payment of the Participant's Service Annuity commences hereunder or a
child adopted by a Participant prior to the time payment of the
Participant's Service Annuity commences hereunder.
(6) Code. The Internal Revenue Code of 1986, as amended.
(7) Committee. The Service Annuity Committee appointed by the board
of directors of the Company pursuant to Section 10.1 (relating to matters
concerning the Committee) that administers the Plan.
(8) Company. Exelon Corporation, a Pennsylvania corporation, or any
successor or successors.
(9) Consumer Price Index. The United States Bureau of Labor
Statistics Consumer Price Index (U.S. City Average 1967 = 100). Such term
shall also mean such index as it may from time to time be changed or, if
it shall be discontinued, the most nearly comparable index, appropriately
adjusted to yield results comparable with those which would have been
produced if the index as defined in the preceding sentence had been used,
as determined by the Committee.
(10) Credited Service. The period of a Participant's employment
which is used to compute the Participant's Service Annuity and eligibility
for commencement of payment of such Service Annuity under Article 5
(relating to Service Annuities) and Article 6 (relating to Service Annuity
forms). A Participant's Credited Service includes the Participant's
Credited Service prior to the Effective Date determined in accordance with
the provisions of the Plan as in effect prior to the Effective Date, and
the period beginning on the Effective Date during which the Participant
shall have been an Eligible Employee, including, (a) any period during
which the Participant is in Military Service, provided that the
Participant returns to the employ of an Employer within the period
prescribed by laws relating to the reemployment rights of persons in
Military Service, (b) any period during which the Participant is employed
by a union that represents any group of Employees, (c) any period for
which back pay is awarded to the Participant and pursuant to which award
the Participant is required to receive
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Credited Service under the Plan, (d) the period following Termination of
Employment on account of a Total and Permanent Disability during which the
Participant is receiving benefits under any Employer's long term
disability plan and (e) as and to the extent provided by resolutions of
the board of directors of the Company, (i) any period of employment by
Affiliates or other companies, and (ii) any period of authorized absence
from such employment or from employment as an Eligible Employee. A
Participant's periods of Credited Service before and after a period of
absence from employment that is not included in the Participant's Credited
Service pursuant to the preceding sentences shall be aggregated only if
(i) the Participant completes at least one year of Credited Service after
such period of absence and (ii) the number of years of such period of
absence from employment is less than five.
(11) Dependent Minor Child. A Child who, as of the time of the
Participant's retirement or death, is under the age of 21 and qualifies as
a dependent of the Participant within the meaning of Section 152 of the
Code.
(12) Dependent Disabled Child. A Child who, as of the time of the
Participant's retirement or death, has a permanent physical or mental
disability, as certified by the medical director of the Company or by such
other licensed physician designated by the Committee, that causes such
Child to be unable to engage in substantial gainful employment, and is a
dependent of the Participant within the meaning of Section 152 of the Code
(determined by disregarding any age limitation contained in Section 152 of
the Code).
(13) Earnings. The Participant's earnings during the Participant's
period of Credited Service on and before December 25, 1994 determined in
accordance with the provisions of the Plan as in effect prior to the
Effective Date.
(14) Effective Date. The Effective Date of this amendment and
restatement of the Plan with respect to the Company and any other entity
that was an Employer on March 31, 1995 shall be April 1, 1995 and in the
case of any other Employer shall be the date designated by such Employer.
(15) Eligible Employee. (a) Any Employee who was an Eligible
Employee on December 31, 2000, and who is receiving regular salary or
wages from and rendering services to an Employer, or any such individual
who is on an authorized leave of absence, and (b) on or after January 1,
2001, any Employee who (i) is a member of IBEW Local Union 15 who becomes
initially employed at a facility that, as of October 19, 2000, was owned
by Commonwealth Edison Company, Unicom Corporation or any affiliate of
Unicom Corporation, (ii) elects to participate in this Plan and (iii) is
either receiving regular salary or wages from and rendering services to an
Employer, or is on an authorized leave of absence; but, in either case
excluding (i) an Employee the terms of whose employment are subject to a
collective bargaining agreement that does not provide for participation in
this Plan, (ii) an Employee paid on the temporary payroll of an Employer
who has never completed at least 1,000 Hours of Service in any period
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of twelve consecutive months beginning with the Employee's date of hire or
anniversary thereof, (iii) an Employee who executes a written waiver of
his or her right to participate in the Plan; and (iv) an individual who
performs services for an Employer, pursuant to an agreement (written or
oral) that classifies such individual's relationship with the Employer as
other than an Employee. Notwithstanding anything contained in the Plan to
the contrary, any Employer may, at the time such Employer elects to
participate in this Plan in the manner described in Section 11.1 (relating
to adoption of the Plan), designate, with the consent of the Company, a
specified group of Employees who will be Eligible Employees. In the case
of Unicom Thermal Technologies Inc. ("Unicom Thermal"), the term "Eligible
Employee" shall mean only those persons rendering service to Unicom
Thermal who (i) formerly were employed by the Company, (ii) transferred
from the employment of the Company to the employment of Unicom Thermal at
the request of the Company, (iii) are otherwise described in the
definition of Eligible Employee set forth in this subdivision (15) and
(iv) completed at least ten years of Credited Service under the Plan at
the time of transfer from the employment of the Company to the employment
of Unicom Thermal; provided, however, any such Employee who had at least
eight years of Credited Service at the time of such transfer shall
continue to be an Eligible Employee in the Plan until such Employee
completes ten years of Credited Service. In the case of any individual
who, as of December 31, 2000, was an Employee of Commonwealth Edison
Company and who subsequently transfers employment to employment with the
Exelon Power Team, such individual shall remain an Eligible Employee
through the second anniversary of the date of such transfer of employment,
and shall not thereafter be an Eligible Employee. In the case of Exelon
Services Inc., the term "Eligible Employee" shall be limited to those
Employees of Exelon Services Inc. who were on the payroll of Unicom Energy
Solutions as of April 1, 2001 and are otherwise Eligible Employees.
(16) Employee. An individual whose relationship with an Employer is,
under common law, that of an employee.
(17) Employer. Exelon Corporation, Commonwealth Edison Company, any
other entity that was an Employer under the Plan on December 31, 2000 and,
on or after January 1, 2001, any other entity that, with the consent of
Exelon Corporation, elects to participate in the Plan in the manner
described in Section 11.1 (relating to adoption of the Plan) either with
respect to all Employees or a specified group of Employees of such entity
and any successor entity that adopts this Plan pursuant to Article 12
(relating to continuance by a successor). If any entity described in the
preceding sentence withdraws from participation in the Plan pursuant to
Section 15.3 (relating to termination of the Plan by an Employer), such
entity shall thereupon cease to be an Employer.
(18) ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
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(19) Federal Benefit. The annual amount of full old age benefits
which would be payable to the Participant under the Federal Social
Security Act at the age at which full old age benefits would be payable to
such Participant under such Act. Except as provided in the following
sentence, the amount of the Federal Benefit and the age at which full old
age benefits become payable shall be determined as of December 25, 1994 in
accordance with the provisions of the Plan as in effect on such date.
Notwithstanding the preceding sentence, solely for purposes of Section 5.6
(relating to Federal Benefit supplemental payments), the amount of Federal
Benefit and the age at which full old age benefits become payable shall be
determined at the time of a Participant's Termination of Employment by
using the terms of the Federal Social Security Act as in effect at such
time. For purposes of the preceding sentence, the amount of Federal
Benefit shall be computed by using an estimated wage history determined by
applying a salary scale based on the actual change in the average national
wage from year to year as determined by the Social Security
Administration, projected backwards, to the Participant's compensation
subject to tax under the Federal Insurance Contributions Act (other than
the Medicare portion) for the calendar year ending immediately prior to
the Participant's Termination of Employment. Notwithstanding the preceding
sentence, in no event shall a Participant's Federal Benefit be greater
than the Federal Benefit determined by using a wage history that assumes
the Participant earned no compensation for periods prior to employment
with the Company and Affiliates and uses actual compensation paid by the
Company and Affiliates for periods of employment with the Company and
Affiliates and, in the case of a Participant who is absent from employment
due to employment by a union that represents any group of Employees, uses
actual compensation paid by such union for periods of employment with such
union.
(20) Highest Average Annual Pay. The sum of a Participant's average
annual Basic Compensation and Incentive Pay (a) with respect to any
Participant who, as of the date of the Participant's Termination of
Employment, is not a member of IBEW Local Union 15, during the four
consecutive years (104 biweekly pay periods), and (b) with respect to any
Participant who, as of the date of the Participant's Termination of
Employment, is a member of IBEW Local Union 15, (i) for Terminations of
Employment occurring on or before September 30, 1999, during the four
consecutive years (104 biweekly pay periods), and (ii) for Terminations of
Employment occurring on or after October 1, 1999, during the three
consecutive years (78 biweekly pay periods), during which such average
annual Basic Compensation and Incentive Pay was the highest, or (b) during
all years of the Participant's Credited Service if such Credited Service
is less than 104 or 78 biweekly pay periods, as applicable. In determining
whether a Participant has 104 or 78 consecutive biweekly pay periods, as
applicable, any period of uncompensated absence from employment with an
Employer, other than an absence due to participation in Military Service
shall be disregarded. In computing "Highest Average Annual Pay," the total
of the Basic Compensation and Incentive Pay for a Participant for the
applicable consecutive pay periods shall be multiplied, in the case of 104
pay periods by 0.25068654 and in the case of 78 pay periods by 0.33424872;
provided, that in the case of a Participant whose
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years of Credited Service include fewer than 104 or 78 pay periods, as
applicable, the multiplier shall be a fraction the numerator of which is
one and the denominator of which is the quotient of (a) the number of
14-day periods during each 365-day period (or if less, during the
Participant's Credited Service) and (b) the number of pay periods during
the Participant's years of Credited Service. In addition, notwithstanding
anything herein to the contrary, in computing an Employee's Highest
Average Annual Pay, the aggregate amount of the Employee's Basic
Compensation and Incentive Pay in excess of the following limits shall not
be taken into account: (i) for Plan Years ending before January 1, 1996,
$200,000 (as adjusted for increases in the cost of living pursuant to
Section 415(d) of the Code for the year in which the computation of Basic
Compensation and Incentive Pay is being made), and (ii) for all subsequent
Plan Years, $150,000 (adjusted for increases in the cost of living in
accordance with Section 401(a)(17) of the Code). For purposes of the
preceding sentence, the limit determined with respect to clause (i) for
the last year for which the computation is made shall be applied for such
year and all preceding years. For Plan Years beginning before January 1,
1997, the Basic Compensation and Incentive Pay of an Employee who is a 5%
owner of Commonwealth Edison Company or any Affiliate or one of the ten
employees of Commonwealth Edison Company and all Affiliates who was paid
the greatest compensation (as defined in Section 415 of the Code) for the
Plan Year shall include the Basic Compensation and Incentive Pay of the
Employee's spouse and any lineal descendants of the Employee who have not
attained age 19 before the close of the Plan Year.
(21) Hour of Service. (a) Each hour for which an Employee is paid,
or entitled to payment, for the performance of duties (such hours to be
credited to the Employee for the computation period or periods in which
the duties are performed); (b) each hour for which an Employee is paid, or
entitled to payment, on account of a period of time during which no duties
are performed (irrespective of whether a Termination of Employment has
occurred) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence (such
hours to be credited to the Employee for the computation period or periods
in which the period of time during which no duties are performed occurs);
and (c) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer (such hours to be
credited to the Employee for the computation period or periods in which
the award or agreement pertains rather than the computation period in
which the award, agreement or payment is made). Hours of Service shall be
computed in accordance with paragraphs (b) and (c) of Section 2530.200b-2
of the Department of Labor Regulations.
(22) Incentive Pay. The payments, if any, earned by the Participant
with respect to each year of Credited Service after 1994, regardless of
when paid, under the plans set forth in Exhibit 2 attached hereto. In the
case of a Participant who is absent from employment due to employment by a
union that represents any group of Employees, Incentive Pay shall mean,
for the period during which the Participant is absent from employment, the
payments the Participant would
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have received under the applicable plan set forth in Exhibit 2 attached
hereto, as determined by the union employing such Participant.
(23) Military Service. The performance of duty on a voluntary or
involuntary basis in a "uniformed service" (as defined below) under
competent authority of the United States government and includes active
duty, active duty for training, initial active duty for training, inactive
duty training, full-time National Guard duty, and a period for which a
person is absent from employment for the purpose of an examination to
determine the fitness of the person to perform any such duty. For purposes
of the preceding sentence, the term "uniformed service" means the Armed
Forces, the Army National Guard and the Air National Guard when engaged in
active duty for training, inactive duty training, or full-time National
Guard duty, the commissioned corps of the Public Health Service, and any
other category of persons designated by the President of the United States
in time of war or emergency.
(24) Normal Retirement Age. A Participant's 65th birthday.
(25) Participant. An Employee described in Article 3 (relating to
participation). An individual shall cease to be a Participant upon the
later of his or her Termination of Employment and the date the individual
is no longer eligible to receive a benefit from this Plan.
(26) Plan. The Plan herein set forth, as from time to time amended.
(27) Plan Year. The calendar year.
(28) Regulations. Written promulgations of the Department of Labor
construing Title I of ERISA or the Internal Revenue Service construing the
Code.
(29) Retiree. A Participant or Beneficiary receiving a Service
Annuity.
(30) Service Annuity. The amount payable to a Retiree from the
Service Annuity Fund under the Plan. Except as otherwise indicated by the
context, such term includes an annuity payable pursuant to paragraph (b)
of Section 6.1 (relating to annuities payable to married Participants),
Section 6.2 (relating to optional Service Annuity forms), Section 6.3
(relating to surviving spouse annuities, Section 5.6 (relating to Federal
Benefit supplemental payments), Section 5.7 (relating to deferred vested
termination) and Section 6.4 (relating to a surviving Child annuity).
(31) Service Annuity Fund. All money and property of every kind held
by the Trustee under the Trust Agreement.
(32) Spouse. The individual married to a Participant on the
Participant's Annuity Starting Date or, if earlier, on the date of the
Participant's death. While the Spouse is living and, except as otherwise
provided in a qualified domestic relations order as described in paragraph
(b) of Section 13.2 (relating to exception
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to nonassignability in the case of a qualified domestic relations order)
or paragraph (c) of Section 6.6 (relating to automatic cancellation of
elections), such Spouse shall be treated as the Participant's Spouse for
all purposes of this Service Annuity System without regard to whether such
Spouse remains married to the Participant after the Participant's Annuity
Starting Date.
(33) Termination of Employment. A Participant's ceasing to be an
Employee of any Employer or any Affiliate. A transfer between employment
by an Employer and employment by an Affiliate or between employment by
Employers or Affiliates shall not constitute a Termination of Employment.
(34) Total and Permanent Disability. A disability which, in the
opinion of the Committee, renders the Participant unable to perform the
principal duties of the Participant's regular job classification or such
other job classification as may be made available to the Participant by an
Employer or an Affiliate and which results from a cause other than one or
more of the following, as determined by the Committee, in its sole
discretion:
(i) excessive or habitual use of drugs, intoxicants, narcotics
or alcohol;
(ii) injury or disease sustained while participating in
illegal activities; or
(iii) injury or disease sustained while employed by another
Employer and arising out of such other employment.
(35) Trust Agreement. The agreement between the Company and the
Trustee governing the Service Annuity Fund.
(36) Trustee. The trustee of the Service Annuity Fund or, if there
shall be more than one trustee acting at any time, all of such trustees
collectively.
(37) Vesting Service. The period of an Employee's employment which
is used to determine whether the Employee is entitled to receive a Service
Annuity under Article 5 (relating to Service Annuities). An Employee's
Vesting Service includes the Participant's vesting service prior to the
Effective Date determined in accordance with the provisions of the Plan as
in effect prior to the Effective Date and the aggregate of the periods
beginning on or after the Effective Date during which the Employee is
employed by an Employer or an Affiliate, provided that in the case of an
Employee who has no vested right to any benefits under this Plan, such
Employee's periods of Vesting Service before and after a period of absence
from employment shall be aggregated only when the Employee's number of
consecutive one-year periods of absence from employment is less than five
and the Employee has at least one year of Vesting Service after such
period of absence from employment. For purposes of the preceding sentence,
an Employee shall be deemed to be employed by an Employer or an Affiliate
during (a) any period of absence from employment by an Employer or an
Affiliate which is of less than
-9-
twelve months' duration, (b) the first twelve months of any period of
absence from employment for any reason other than the Employee's quitting,
retiring or being discharged, except as provided in clause (f) below, (c)
any period during which the Employee is in Military Service, provided that
the Employee returns to the employ of an Employer or an Affiliate within
the period prescribed by laws relating to the reemployment rights of
persons in Military Service, (d) any period, whether less than or greater
than twelve months, during which the Participant is employed by a union
that represents any group of Employees, (e) the period following
Termination of Employment on account of a Total and Permanent Disability
during which the Participant is receiving benefits under any Employer's
long term disability plan and (f) as and to the extent provided by
resolutions of the board of directors of the Company, any period of
authorized absence from employment as an Eligible Employee. The Committee
may require certification from an Employee, as a condition of granting
Vesting Service under this subdivision (37), that the leave was taken for
one of the reasons enumerated in the preceding sentence. Notwithstanding
the preceding sentences, in determining an Employee's period of absence
from employment by an Employer or an Affiliate, the following shall be
disregarded: the first twenty-four months of any period of absence from
employment by reason of (i) the Employee's pregnancy, (ii) the birth of
the Employee's child, (iii) the placement of a child with the Employee in
connection with the adoption of such child by such Employee or (iv) caring
for such child for a period beginning immediately following such birth or
placement.
Section 2.2. Gender and Plurals. Wherever used in this Plan, words
in the masculine gender shall include masculine or feminine gender, and, unless
the context otherwise requires, words in the singular shall include the plural,
and words in the plural shall include the singular.
ARTICLE 3
PARTICIPATION
Section 3.1. Employees Represented by IBEW Local Union 15. Each
Eligible Employee who is a member of a collective bargaining unit represented by
IBEW Local Union 15 and who was a Participant in the Plan on December 31, 2000
shall continue to be a Participant as of January 1, 2001. Each other Eligible
Employee who is a member of IBEW Local Union 15 shall become a Participant as of
the first day that such Eligible employee completes an Hour of Service with an
Employer as an Eligible Employee, provided that such Eligible Employee does
-10-
not elect, in the time and manner prescribed by the Committee for such an
election, to participate in the Exelon Corporation Cash Balance Pension Plan for
Bargaining Unit Employees.
Section 3.2. Management Employees. (a) In General. Each Participant
who is not a member of a collective bargaining unit represented by IBEW Local
Union 15 and who is, as of January 1, 2002, an Eligible Employee shall be
permitted to elect, in the time and manner prescribed by the Committee, to
either (i) continue participating in the Plan on and after January 1, 2002 or
(ii) cease participating in the Plan as of December 31, 2001 and begin
participating in the Exelon Corporation Cash Balance Pension Plan as of January
1, 2002. Each Eligible Employee who elects to continue participating in the Plan
or who is offered and fails to make any such election shall continue to be a
Participant as of January 1, 2002. Each Eligible Employee who elects to
participate in the Exelon Corporation Cash Balance Pension Plan in lieu of
participation in this Plan shall cease participation in the Plan as of December
31, 2001 and shall not be entitled to any benefit under the Plan, unless such
Participant receives a notification (the "Notice") from an Employer that his or
her employment with the Employers and their Affiliates will be terminated on or
before December 31, 2002 and that such Participant is eligible for severance
benefits under the Exelon Corporation Merger Separation Plan for Designated
Management Employees or any other severance plan maintained by an Employer or an
Affiliate. An Eligible Employee who receives a Notice shall continue to be a
Participant in the Plan until his or her Termination of Employment,
notwithstanding such Eligible Employee's election to participate in the Exelon
Corporation Cash Balance Pension Plan. An Eligible Employee (i) who receives a
Notice, but whose employment does not terminate on or before December 31, 2002,
or (ii) whose employment terminates before December 31, 2002 without the
Employee receiving a Notice shall cease participation in the Plan as of December
31, 2001 if such Employee elects, in
-11-
the time and manner prescribed by the Committee, to participate in the Exelon
Corporation Cash Balance Pension Plan.
(b) Transfer of Benefits and Assets to Cash Balance Pension Plan. If
an Eligible Employee described in paragraph (a) above elects to participate in
the Exelon Corporation Cash Balance Pension Plan in lieu of participating in the
Plan, the Employee's Service Annuity, determined as of December 31, 2001 based
on the Employee's Credited Service and Highest Annual Average Pay as of such
date but without giving effect to Section 5.6, shall be transferred to the
Exelon Corporation Cash Balance Pension Plan and such Employee shall not accrue
any additional benefit under the Plan. An amount of assets that is equal to the
present value of the Participant's Service Annuity described in the preceding
sentence, determined using the methods and assumptions prescribed by Section
4044 of ERISA, shall also be transferred to the Exelon Corporation Cash Balance
Pension Plan. Such transfer of benefits and assets related thereto shall occur
as soon as administratively practicable after the Eligible Employee makes the
election described in paragraph (a) above. In the event that an Eligible
Employee whose Service Annuity and related assets are transferred to the Exelon
Corporation Cash Balance Pension Plan receives a Notice and has a Termination of
Employment on or before December 31, 2002, the Service Annuity and related
assets that were transferred to the Exelon Corporation Cash Balance Pension Plan
shall be transferred back to the Plan and the amount of the pension benefit
accrued by such Employee during 2002 (if any) shall be determined under the
terms of this Plan rather than the Exelon Corporation Cash Balance Pension Plan.
Such transfer shall occur as soon as administratively practicable.
Section 3.3. Cessation of Participation. An individual's
participation in the Plan shall cease upon the first to occur of the date the
individual is no longer eligible to receive a
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benefit from this Plan or upon the individual's Termination of Employment if the
individual has not completed at least five years of Vesting Service upon the
date of his or her Termination of Employment.
ARTICLE 4
CONTRIBUTIONS
Section 4.1. Amount of Contributions. The Employers intend to make
contributions to the Service Annuity Fund of amounts which, in the aggregate
over a period of time, are sufficient to finance the benefits provided by the
Plan. All such contributions shall be in such amounts and shall be made in such
manner and at such time as the Company shall from time to time determine in
accordance with the funding policy it establishes and consistent with minimum
funding standards under Section 412 of the Code. the Company may rely on the
advice of actuaries in establishing and carrying out a funding policy.
Forfeitures arising under the Plan for any reason shall be applied to reduce the
cost of the Plan, not to increase the Service Annuities payable to Participants,
Beneficiaries or Retirees.
Section 4.2. Return of Contributions. Any contribution made to the
Service Annuity Fund by an Employer by reason of a good faith mistake of fact,
or any contribution made to the Service Annuity Fund by an Employer which
exceeds the maximum amount for which a deduction is allowable to the Employer
for federal income tax purposes by reason of a good faith mistake in determining
the maximum deductible amount, shall upon the request of the Employer be
returned by the Trustee to the Employer. The Employer's request and the return
of any such contribution must be made within one year after such contribution
was mistakenly made or after the deduction of such excess portion of such
contribution was disallowed, as the case may be. The amount to be returned to
the Employer pursuant to this Section 4.2 shall be the
-13-
excess of (a) the amount contributed over (b) the amount that would have been
contributed had there not been a mistake of fact or a mistake in determining the
maximum allowable deduction. Earnings attributable to the amount contributed by
mistake shall not be returned to the Employer, but losses attributable thereto
shall reduce the amount so returned.
ARTICLE 5
SERVICE ANNUITIES
Section 5.1. Description of Service Annuities. Each Participant
whose Termination of Employment occurs on or after his or her Normal Retirement
Age shall be entitled to a Service Annuity as described in Section 5.2 (relating
to normal and deferred retirement). Each Participant whose Termination of
Employment occurs prior to the Participant's 65th birthday but after the
Participant has completed at least ten years of Credited Service shall be
entitled to a Service Annuity as described in Section 5.3 (relating to early
retirement). Each Participant whose Termination of Employment occurs on or after
the Participant's 45th birthday on account of a Total and Permanent Disability
shall be entitled to a Service Annuity as described in Section 5.4 (relating to
disability retirement at or after age 45), provided such Participant has
satisfied the conditions set forth in Section 5.4. Each Participant who has
completed at least ten years of Credited Service and whose Termination of
Employment occurs prior to the Participant's 45th birthday on account of Total
and Permanent Disability shall be entitled to a Service Annuity as described in
Section 5.5 (relating to disability retirement before age 45), provided such
Participant has satisfied the conditions set forth in Section 5.5. Each
Participant whose Termination of Employment occurs after the Participant has
completed at least five years of Vesting Service but who is not described in any
of the preceding sentences
-14-
shall be entitled to a Service Annuity described in Section 5.7 (relating to
deferred vested termination).
Section 5.2. Normal and Deferred Retirement. (a) In General. Each
Participant whose Termination of Employment occurs on or after the Participant's
Normal Retirement Age shall be entitled, subject to Section 6.1 (relating to the
basic Service Annuity form of payment), to receive a Service Annuity payable in
semi-monthly payments for the Participant's lifetime commencing on the Service
Annuity payment date immediately following the day the Participant's status on
the Human Resource system of the Company is changed to "inactive." The annual
amount of such Service Annuity shall equal, subject to Section 5.8 (relating to
special rules for computation of Service Annuities), Section 7.1 (relating to
maximum annual benefits) and Section 7.2 (relating to temporary restrictions on
benefits in case of termination or curtailment), the sum of the amounts
described in subparagraphs (A), (B) and (C) below:
(A) 1.25% of the Participant's Earnings, reduced by 25% (less
1% for each year, if any, by which the Participant's years of
Credited Service as of December 25, 1994 are less than 35, computed
to the nearest full year) of the Participant's Federal Benefit,
determined as of December 25, 1994.
(B) 1.60% of the Participant's Highest Average Annual Pay,
multiplied by the number of years of the Participant's Credited
Service (not in excess of 35 years in the year 1995, 36 years in the
year 1996, 37 years in the year 1997, 38 years in the year 1998, 39
years in the year 1999 and 40 years in the year 2000 and
thereafter).
(C) 0.5% of the Participant's Highest Average Annual Pay,
multiplied by the number of years, if any, by which the
Participant's years of Credited Service (not in excess of 40) exceed
the limitation on the number of years of Credited Service taken into
account under subparagraph (B) of paragraph (a) of this Section 5.2.
Notwithstanding the preceding, the annual amount of the Service
Annuity for a Participant who has at least 10 years of Credited Service shall
not be less than the applicable amount stated in Table A.
-15-
(b) Special Rule for Participants Who Attain Age 70-1/2 While
Employed. If a Participant remains employed by an Employer or an Affiliate
beyond April 1 of the year following the year in which the Participant attains
age 70-1/2, distribution of such Participant's Service Annuity (i) shall
commence, in the case of a Participant who is a 5-percent owner as defined in
Section 416(i) of the Code, or (ii) may commence, upon any other such Employee's
election, in either case, not later than April 1 next following the calendar
year in which the Participant attains age 70-1/2.
The annual amount of the Participant's Service Annuity that
commences under the preceding paragraph shall be recomputed pursuant to this
Section 5.1 (relating to normal and deferred retirement) as of each succeeding
April 1 to reflect any increase in the Participant's Credited Service and
Highest Average Annual Pay attributable to the Participant's employment since
the preceding April 1.
Notwithstanding any provision in this Plan to the contrary,
distributions of benefits shall be made in accordance with Section 401(a)(9) of
the Code and the Regulations thereunder.
(c) Basic Compensation for Participant with Total and Permanent
Disability. In the case of a Participant whose Termination of Employment is on
account of a Total and Permanent Disability and who is entitled to a Service
Annuity under either paragraph (b) of Section 5.4 (relating to disability
retirement at or after age 45 for management Employees whose termination occurs
on or after January 1, 1997) or paragraph (b) of Section 5.5 (relating to
disability retirement before age 45 for management Employees whose termination
occurs on or after January 1, 1997), Basic Compensation shall mean, for the
period following the Participant's Termination of Employment and during which
the Participant is receiving benefits under any
-16-
Employer's long term disability plan, the Participant's average base pay rate
per pay period for the twelve-month period preceding the first day of the
Participant's absence due to such Total and Permanent Disability increased each
October 1 following the Participant's Termination of Employment at a rate equal
to the cost of living adjustment described in the following sentence. For
purposes of the preceding sentence, the cost of living adjustment shall equal,
for each October 1, the percentage by which the Consumer Price Index for the
July immediately preceding such October 1 exceeds the Consumer Price Index for
the July immediately preceding the twelve month period beginning October 1 in
which the Participant's Termination of Employment occurred; provided, however,
that:
(i) If, as of such October 1, there shall be no such excess, the
adjustment percentage shall be deemed to be zero for the twelve-month
period beginning on such October 1.
(ii) There shall be no negative adjustment percentage.
(iii) The aggregate adjustment percentage for any twelve-month
period beginning October 1 shall never be lower than the aggregate
adjustment percentage for the preceding such period.
(iv) If the percentage increase in the Consumer Price Index computed
for the twelve-month period beginning on October 1 does not exceed the
aggregate adjustment percentage for the preceding twelve-month period by
at least three percentage points, the aggregate adjustment percentage for
the preceding twelve-month period shall continue in effect during such
twelve-month period beginning on October 1.
(v) The aggregate adjustment percentage for any twelve-month period
beginning on October 1 shall not be more than seven percentage points
greater than that for the preceding twelve-month period. If the aggregate
adjustment percentage for any twelve-month period beginning on October 1
exceeds by more than seven percentage points the aggregate adjustment
percentage for the preceding twelve-month period, the excess shall be
carried over to succeeding twelve-month periods until such excess is
reduced to zero.
(vi) The adjustment percentage for the twelve-month period beginning
with the October 1 next following the date the Participant's Termination
of Employment occurs shall be the adjustment percentage determined in
accordance with the preceding provisions of this Section 5.2(c) multiplied
by a fraction the
-17-
numerator of which shall be the number of full calendar months between
such date and such October 1 and the denominator of which shall be twelve.
The adjustment described in this Section 5.2(c) shall continue to be made unless
and until the Participant ceases to be eligible to receive benefits under any
Employer's long term disability plan. Notwithstanding the preceding sentence, if
a Participant returns to employment with any Employer and ceases to be eligible
to receive benefits under any Employer's long term disability plan but again
becomes eligible to receive such benefits as a continuation of the same Total
and Permanent Disability, as determined under the provisions, or
interpretations, of the Employer's long term disability plan, the adjustments
described in this Section 5.2(c) shall continue to be made as though the
Participant had never ceased to be eligible for such benefits, provided that an
adjustment shall be made for any earnings received by the Participant while the
Participant was employed by any Employer.
Section 5.3. Early Retirement. Each Participant whose Termination
of Employment occurs prior to the Participant's 65th birthday but after the
Participant has completed at least ten years of Credited Service and has
attained age 50 shall be entitled to elect, subject to Section 6.1 (relating to
the basic Service Annuity form of payment), to receive an early retirement
Service Annuity payable in semi-monthly payments for the Participant's lifetime
commencing no earlier than the Service Annuity payment date immediately
following the day the Participant's status on the Human Resource system of the
Company is changed to "inactive" and no later than the Service Annuity payment
date coinciding with or immediately following the date the Participant attains
age 65. The annual amount of such early retirement Service Annuity shall,
subject to Section 5.8 (relating to special rules for computation of Service
Annuities), Section 7.1 (relating to maximum annual benefits) and Section 7.2
(relating to temporary restrictions on benefits in the case of termination or
curtailment) be the amount computed
-18-
pursuant to Section 5.2 (relating to normal and deferred retirement) multiplied
by the applicable factor (determined with reference to the Participant's
attained age at the time benefits commence to be paid) from (a) with respect to
(i) any Participant who is not a member of IBEW Local Union 15 whose Termination
of Employment occurs on or after April 1, 1995, and (ii) any Participant who is
a member of IBEW Local Union 15 whose Termination of Employment occurred after
April 1, 1995 and before October 1, 1999, Table B, and (b) with respect to any
Participant who is a member of IBEW Local Union 15 whose Termination of
Employment occurs on or after October 1, 1999, Table B-1.
Section 5.4. Disability Retirement at or After Age 45. (a) Rules
Applicable to Management Employees Whose Termination Occurs Before January 1,
1997 and to Union Employees. Each Eligible Participant (as defined in the
following paragraph) whose Termination of Employment occurs on or after the
Eligible Participant's 45th birthday on account of a Total and Permanent
Disability and who is not then eligible for a Service Annuity under Section 5.2
(relating to normal and deferred retirement) or Section 5.3 (relating to early
retirement) shall be entitled to elect, subject to Section 6.1 (relating to the
basic Service Annuity form of payment), without regard to the number of the
Eligible Participant's years of Credited Service, to receive a disability
Service Annuity payable in semi-monthly payments for the Eligible Participant's
lifetime commencing no earlier than the Service Annuity payment date immediately
following the day the Eligible Participant's status on the Human Resource system
of the Company is changed to "inactive" and no later than the Service Annuity
payment date coinciding with or immediately following the date the Eligible
Participant attains age 65. The annual amount of such disability Service Annuity
shall, subject to Section 5.8 (relating to special rules for computation of
Service Annuities), Section 7.1 (relating to maximum annual benefits)
-19-
and Section 7.2 (relating to temporary restrictions on benefits in case of
termination or curtailment), be the amount computed pursuant to Section 5.3
(relating to early retirement), except that if the Eligible Participant's
employment terminated on account of a Total and Permanent Disability prior to
the Eligible Participant's 55th birthday, the Eligible Participant shall be
treated as though he or she attained age 55 for purposes of determining the
applicable factor from Table B.
For purposes of this Section 5.4, an "Eligible Participant" shall
mean (a) a Participant who, at the time the Participant's employment terminates,
is a member of Local Union 15, International Brotherhood of Electrical Workers
and (b) a Participant who is not, at the time the Participant' employment
terminates, a member of such Local Union 15, but whose employment terminates
prior to January 1, 1997.
(b) Rules Applicable to Management Employees Whose Termination
Occurs on or After January 1, 1997. Each Participant who is a management
Employee, whose Termination of Employment occurs on or after January 1, 1997 and
on or after the Participant's 45th birthday on account of a Total and Permanent
Disability and who is not then eligible for a Service Annuity under Section 5.2
(relating to normal and deferred retirement) or Section 5.3 (relating to early
retirement) shall be entitled to elect, subject to Section 6.1 (relating to the
basic Service Annuity form of payment), without regard to the number of the
Participant's years of Credited Service, to receive a disability Service Annuity
payable in semi-monthly payments for the Participant's lifetime commencing no
earlier than the Service Annuity payment date immediately following the day the
Participant's status on the Human Resource system of the Company is changed to
"inactive", provided that such Participant (i) shall have qualified for and
received long-term disability benefits under the Commonwealth Edison Company
Disability Benefit Plan
-20-
for Management Employees (the "LTD Plan"), (ii) shall be eligible to receive
Social Security benefits on account of such disability and (iii) shall no longer
be eligible to receive benefits under the LTD Plan because such benefits have
been exhausted. In no event shall the semi-monthly payments described in the
preceding sentence commence later than the later of (a) the Service Annuity
payment date coinciding with or immediately following the date the Participant
attains age 65 and (b) the date the Participant ceases to be eligible to receive
benefits under the LTD Plan because such benefits have been exhausted. The
annual amount of such disability Service Annuity shall, subject to Section 5.8
(relating to special rules for computation of Service Annuities), Section 7.1
(relating to maximum annual benefits) and Section 7.2 (relating to temporary
restrictions on benefits in case of termination or curtailment), be the amount
computed pursuant to Section 5.3 (relating to early retirement), except that if
the Participant's employment terminated on account of a Total and Permanent
Disability prior to the Participant's 55th birthday, the Participant shall be
treated as though he or she attained age 55 for purposes of determining the
applicable factor from Table B.
Section 5.5. Disability Retirement Before Age 45. (a) Rules
Applicable to Management Employees Whose Termination Occurs Before January 1,
1997 and to Union Employees. Each Eligible Participant (as defined in the
following paragraph) who has completed at least 10 years of Credited Service and
whose Termination of Employment occurs prior to the Eligible Participant's 45th
birthday on account of a Total and Permanent Disability shall be entitled to
elect, subject to Section 6.1 (relating to the basic Service Annuity form of
payment), to receive a reduced disability Service Annuity payable in
semi-monthly payments for the Eligible Participant's lifetime commencing no
earlier than the Service Annuity payment date immediately following the day the
Eligible Participant's status on the Human Resource system
-21-
of the Company is changed to "inactive" and no later than the Service Annuity
payment date coinciding with or immediately following the date the Eligible
Participant attains age 65. The annual amount of such reduced disability Service
Annuity shall, subject to Section 5.8 (relating to special rules for computation
of Service Annuities), Section 7.1 (relating to maximum annual benefits) and
Section 7.2 (relating to temporary restrictions on benefits in case of
termination or curtailment), be the sum of (a) the amount computed pursuant to
Section 5.4 (relating to disability retirement at or after age 45) plus (b) the
excess, if any, of (i) 25% of the Eligible Participant's Highest Average Annual
Pay over (ii) the sum of the annual amount computed under Section 5.4 (relating
to disability retirement at or after age 45) plus the aggregate annual amount of
the Federal Benefit supplemental payments payable to such Eligible Participant
pursuant to Section 5.6 (relating to the Federal Benefit supplemental payments).
For purposes of this Section 5.5, an "Eligible Participant" shall
mean (a) a Participant who, at the time the Participant's employment terminates,
is a member of Local Union 15, International Brotherhood of Electrical Workers
and (b) a Participant who is not, at the time the Participant' employment
terminates, a member of such Local Union 15, but whose employment terminates
prior to January 1, 1997.
(b) Rules Applicable to Management Employees Whose Termination
Occurs on or After January 1, 1997. Each Participant who is a management
Employee, who has completed at least 10 years of Credited Service and whose
Termination of Employment occurs on or after January 1, 1997 and prior to the
Participant's 45th birthday on account of a Total and Permanent Disability shall
be entitled to elect, subject to Section 6.1 (relating to the basic Service
Annuity form of payment), to receive a reduced disability Service Annuity
payable in semi-monthly payments for the Participant's lifetime commencing no
earlier than the Service Annuity payment
-22-
date immediately following the day the Participant's status on the Human
Resource system of the Company is changed to "inactive" and no later than the
Service Annuity payment date coinciding with or immediately following the date
the Participant attains age 65 provided, that such Participant (i) shall have
qualified for and received long-term disability benefits under the LTD Plan,
(ii) shall be eligible to receive Social Security benefits on account of such
disability and (iii) shall no longer be eligible to receive benefits under the
LTD Plan because such benefits have been exhausted. The annual amount of such
reduced disability Service Annuity shall, subject to Section 5.8 (relating to
special rules for computation of Service Annuities), Section 7.1 (relating to
maximum annual benefits) and Section 7.2 (relating to temporary restrictions on
benefits in case of termination or curtailment), be the sum of (a) the amount
computed pursuant to Section 5.4 (relating to disability retirement at or after
age 45) plus (b) the excess, if any, of (i) 25% of the Participant's Highest
Average Annual Pay over (ii) the sum of the annual amount computed under Section
5.4 (relating to disability retirement at or after age 45) plus the aggregate
annual amount of the Federal Benefit supplemental payments payable to such
Participant pursuant to Section 5.6 (relating to the Federal Benefit
supplemental payments).
Section 5.6. Federal Benefit Supplemental Payments Prior to Age 65.
Each Participant whose Service Annuity is computed pursuant to Section 5.3
(relating to early retirement), Section 5.4 (relating to disability retirement
at or after age 45) or Section 5.5 (relating to disability retirement before age
45) and which commences prior to the Participant's attainment of age 65 shall
receive supplemental monthly payments each in an amount equal to 80% of the
amount of the Participant's monthly Federal Benefit and, except in the case of a
Participant whose Service Annuity is computed under Section 5.5 (relating to
disability retirement before age 45), shall have his or her Service Annuity
reduced by an amount equal to
-23-
the product of (a) the aggregate annual amount of such supplemental monthly
payments multiplied by (b) the applicable factor (determined with reference to
the Participant's attained age at the time benefits commence to be paid) from
(i) with respect to (A) any Participant who is not a member of IBEW Local Union
15 whose Termination of Employment occurs on or after April 1, 1995, and (B) any
Participant who is a member of IBEW Local Union 15 whose Termination of
Employment occurred after April 1, 1995 and before October 1, 1999, Table B-2,
and (ii) with respect to any Participant who is a member of IBEW Local Union 15
whose Termination of Employment occurs on or after October 1, 1999, Table B-3.
Section 5.7. Deferred Vested Termination. Each Participant whose
Termination of Employment occurs after the Participant has completed at least
five years of Vesting Service and who is not then eligible for a Service Annuity
under Section 5.2 (relating to normal and deferred retirement), Section 5.3
(relating to early retirement), Section 5.4 (relating to disability retirement
at or after age 45) or Section 5.5 (relating to disability retirement before age
45) shall be entitled, subject to Section 6.1 (relating to the basic Service
Annuity form of payment), to receive a deferred Service Annuity payable in
semi-monthly payments for the Participant's lifetime commencing on the first day
of the month elected, in the manner prescribed by the Committee, by the
Participant but not earlier than the first day of the month immediately
following the later of (i) the day the Participant's status on the Human
Resource system of the Company is changed to "inactive" and (ii) the
Participant's 60th birthday or, in the case of a Participant who completed at
least ten years of Credited Service, the Participant's 50th birthday. The annual
amount of such deferred Service Annuity shall, subject to Section 5.8 (relating
to special rules for computation of Service Annuities), Section 7.1 (relating to
maximum annual benefits) and Section 7.2 (relating to temporary restrictions on
benefits in case of termination or
-24-
curtailment), be the amount computed under Section 5.2 (relating to normal and
deferred retirement) multiplied by the applicable factor from Table F to reflect
the Participant's age, if less than 65, at the date upon which payment of the
Participant's deferred Service Annuity commences. In no event shall a
Participant's election hereunder to begin receiving payment of his or her
Service Annuity permit such payments to begin later than April 1 of the calendar
year following the calendar year in which the Participant attains age 70-1/2.
Notwithstanding anything herein to the contrary, if a Participant entitled to a
deferred Service Annuity under this Section 5.7 fails to make an election to
begin receiving his or her deferred Service Annuity, payment of the
Participant's Service Annuity shall commence no later than 60 days following the
Plan Year in which the Participant attains age 65.
Each Participant whose employment is terminated before the
Participant completes at least five years of Vesting Service and who is not then
eligible for a Service Annuity under Section 5.2 (relating to normal and
deferred retirement), Section 5.3 (relating to early retirement), Section 5.4
(relating to disability retirement at or after age 45) or Section 5.5 (relating
to disability retirement before age 45) shall be entitled to no benefits
whatsoever under this Plan. Such a Participant's vested interest in his or her
benefit under the Plan shall have a value of zero and such Participant shall be
deemed to receive immediately upon the Participant's Termination of Employment a
lump sum distribution of such vested interest and concurrent therewith the
Participant shall forfeit his or her accrued benefit under the Plan.
Section 5.8. Special Rules Applicable to the Computation of Service
Annuities. (a) Minimum Normal, Early Retirement and Deferred Vested Termination
Benefits. The Service Annuity to which a Participant is entitled under Section
5.2 (relating to normal or deferred retirement) or Section 5.3 (relating to
early retirement) shall in no event be less than the
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hypothetical Service Annuity which the Participant would have been entitled to
receive had the Participant retired under Section 5.3 (relating to early
retirement) at any time prior to the Participant's actual date of retirement and
elected to have such hypothetical Service Annuity commence on the Participant's
hypothetical early retirement date; provided, however, that any difference
between such Service Annuities which is attributable to an increase in the
amount of the Participant's Federal Benefit due to changes in the Federal Social
Security Act between such hypothetical early retirement date and the
Participant's date of retirement shall be disregarded.
Notwithstanding any other provision of this Article 5 (relating to
Service Annuities), the Service Annuity of a Participant terminating employment
on or after April 1, 1995 but prior to July 1, 1995 shall be the greater of the
Service Annuity accruing under the provisions of this Article 5 (relating to
Service Annuities) and the Service Annuity that would have accrued as of the
date of the Participant's Termination of Employment if the provisions of the
Plan in effect as of March 31, 1995 had remained in effect.
(b) Termination of Employment During Authorized Absence. In
computing the annual amount of the Service Annuity pursuant to Section 5.2
(relating to normal and deferred retirement), Section 5.3 (relating to early
retirement), Section 5.4 (relating to disability retirement at or after age 45)
or Section 5.5 (relating to deferred vested termination) for a Participant whose
Termination of Employment occurs during an authorized absence from employment
which is included in the Participant's years of Credited Service pursuant to
subdivision (10) of Section 2.1 (relating to the definition of Credited
Service), such Participant shall be considered to have terminated employment on
the earliest of (i) the date the authorized absence ends, (ii) the date that is
twelve months after the day the authorized absence began and (iii) the date of
the Participant's Termination of Service.
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(c) Service Annuities Based on Compensation In Excess of the Section
401(a)(17) Limits. In the case of a Participant whose Service Annuity was
computed under this Article 5 as of the last day of any Plan Year (the
"grandfather date") prior to the January 1, 1989 Effective Date of Section
401(a)(17) of the Code, which sets forth a compensation limit, or prior to the
January 1, 1996 Effective Date of the reduction in the compensation limit set
forth in Section 401(a)(17) of the Code (the applicable limit being referred to
as the "new compensation limit"), based on Earnings or the aggregate amount of
Base Pay and Incentive Pay in excess of the new compensation limit, such
Participant's Service Annuity under this Article 5 (relating to Service
Annuities) for periods after the applicable grandfather date shall be the
greater of:
(i) the sum of (a) the Participant's Service Annuity determined as
of such grandfather date, plus (b) the Participant's Service Annuity
determined after such date by applying the new compensation limit and
based only on the Participant's years of Credited Service after such date;
and
(ii) the Service Annuity determined after the grandfather date by
applying the new compensation limit and based on all of the Participant's
years of Credited Service.
(d) Participants Formerly Employed at the Company's Fossil-Fired
Generation Facilities. (i) Participants entitled to a Service Annuity Under
Section 5.7. Notwithstanding anything contained in the Plan to the contrary, a
"Terminated Participant" (as defined below) who, but for this subparagraph (i)
of Section 5.8(d), would have his or her Service Annuity computed under Section
5.7 (relating to Deferred Vested Termination), shall have his or her Service
Annuity computed under (a) Section 5.2 (relating to normal and deferred
retirement) if the Participant is at least age 65 on the date his or her Service
Annuity payments commence or (b) Section 5.3 (relating to early retirement) if
the Participant is at least age 50, but not yet age 65, on the date his or her
Service Annuity payments commence, in either case, treating the Participant
(solely for purposes of Section 5.2 or 5.3, as the case may be, but not for any
other
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purpose) as though his or her Termination of Employment occurred on the day
immediately preceding the date that such Participant's Service Annuity payments
commence; provided, however, that such Participant's Service Annuity shall be
computed taking into account his Highest Average Annual Pay and Credited Service
determined as of the date of his actual Termination of Employment. For purposes
of the preceding sentence, a "Terminated Participant" shall mean a Participant
whose Termination of Employment with the Company occurs as a result of the sale
of any of the assets sold as part of a divestiture process commencing in 1998 of
the Company's fossil-fired generation facilities to one or more purchasers,
provided that, on the "Determination Date" (defined in subparagraph (iii)
below), (a) the sum of such Participant's years of age and years of Credited
Service, including as Credited Service any period between the Participant's
actual Termination of Employment date and the "Determination Date" (defined in
subparagraph (iii) below) equals or exceeds 60 and (b) such Participant is not
then eligible for a Service Annuity under Section 5.2 (relating to normal and
deferred retirement) or Section 5.3 (relating to early retirement).
(ii) "Determination Date" Used to Determine Eligibility for a
Service Annuity Under Section 5.3. Further notwithstanding anything
contained herein to the contrary, for purposes of determining whether an
"Eligible Participant" (as defined below) is entitled to a Service Annuity
under Section 5.3 (relating to early retirement), such Eligible
Participant shall be treated (solely for purposes of Section 5.3) as
though his or her Termination of Employment occurred on the "Determination
Date" (defined in subparagraph (iii) below). For purposes of the preceding
sentence, an "Eligible Participant" shall mean a Participant whose
Termination of Employment occurs as a result of the sale of any of the
assets sold as part of a divestiture process commencing in 1998 of the
Company's fossil-fired generation facilities to one or more purchasers,
provided that, on the "Determination Date" (defined in subparagraph (iii)
below), such Participant (a) has attained at least age 50 and (b) has at
least ten years of Credited Service, including as Credited Service any
period between the Participant's actual Termination of Employment date and
the "Determination Date" (defined in subparagraph (iii) below).
(iii) Definition of Determination Date. For purposes of this Section
5.8(d), the "Determination Date" shall mean the later of the date on which
the
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transfer of ownership of all FGG assets offered as part of a sale process
commencing in 1998 has been completed or the date any remaining FGG assets
have been removed by the Company from such sale process.
(iv) As required under Section 5.5(b)(i) of that certain Asset Sale
Agreement By and Between Commonwealth Edison Company and Edison Mission
Energy as to Fossil Fuel Generating Assets dated as of March 22, 1999, (A)
the benefits payable under the Plan to any Participant who becomes
employed by Edison Mission Energy or any subsidiary thereof on the date
the transactions contemplated by that Agreement are consummated (a
"Transferred Participant") shall be fully vested and nonforfeitable,
effective as of the Determination Date (as defined in subparagraph (iii),
above), and (B) no Transferred Participant shall accrue additional
benefits under the Plan after the Determination Date, or, if later, the
date of such Transferred Participant's Termination of Employment.
Section 5.9. Post Retirement Adjustments. The annual Service
Annuity payable pursuant to this Article 5 (relating to Service Annuities) and
Article 6 (relating to Service Annuity forms) that commences either (a) after
September 30, 1999, or (b) by reason of (x) the Termination of Employment of a
Participant after September 30, 1999 under circumstances that entitle the
Participant to a Service Annuity under Section 5.2 (relating to normal and
deferred retirement), Section 5.3 (relating to early retirement), Section 5.4
(relating to disability retirement at or after age 45), Section 5.5 (relating to
disability retirement before age 45) or Section 5.7 (relating to deferred vested
terminations), or (y) the Termination of Employment of the Participant after
September 30, 1999 by reason of the Participant's death shall, subject to the
limitations set forth in this Section 5.9, be adjusted each October 1 for the
twelve-month period then beginning by adding a post-retirement cost of living
adjustment computed by applying an adjustment percentage to the appropriate base
specified in this Section 5.9.
(a) The adjustment percentage shall equal, for each October 1, the
percentage by which the Consumer Price Index for the July immediately preceding
such October 1 exceeds the Consumer Price Index for the July immediately
preceding the twelve-month period beginning October 1 in which the Participant
terminated employment under circumstances described in the
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first sentence of this Section 5.9 or payment of a Service Annuity commenced;
provided, however, that:
(i) If, as of such October 1, there shall be no such excess, the
adjustment percentage shall be deemed to be zero for the twelve-month
period beginning on such October 1.
(ii) There shall be no negative adjustment percentage.
(iii) The aggregate adjustment percentage for any twelve-month
period beginning October 1 shall never be lower than the aggregate
adjustment percentage for the preceding such period.
(iv) If the percentage increase in the Consumer Price Index computed
for the twelve-month period beginning on October 1 does not exceed the
aggregate adjustment percentage for the preceding twelve-month period by
at least three percentage points, the aggregate adjustment percentage for
the preceding twelve-month period shall continue in effect during such
twelve-month period beginning on October 1.
(v) The aggregate adjustment percentage for any twelve-month period
beginning on October 1 shall not be more than seven percentage points
greater than that for the preceding twelve-month period. If the aggregate
adjustment percentage for any twelve-month period beginning on October 1
exceeds by more than seven percentage points the aggregate adjustment
percentage for the preceding twelve-month period, the excess shall be
carried over to succeeding twelve-month periods until such excess is
reduced to zero.
(vi) The adjustment percentage for the twelve-month period beginning
with the October 1 next following the date the Participant's Service
Annuity commences shall be the adjustment percentage determined in
accordance with the preceding provisions of this Section 5.9 multiplied by
a fraction the numerator of which shall be the number of full calendar
months between such date and such October 1 and the denominator of which
shall be twelve.
(b) To determine the amount of the monthly cost of living adjustment
made after October 1, 1999 with respect to any employee who, on the date of his
or her Termination of Employment is a member of IBEW Local Union 15, in the case
of a Service Annuity payable to a Participant pursuant to this Article 5
(relating to Service Annuities) or Article 6 (relating to Service Annuity
forms), the adjustment percentage shall be applied to the first $500 per month
of his or her Service Annuity, computed pursuant to this Article 5 (relating to
Service Annuities),
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subject to a maximum monthly adjustment of $1,000 or, if the monthly amount of
such Service Annuity is less than $1,000 per month, subject to a maximum monthly
adjustment equal to the monthly Service Annuity payment. To determine the amount
of the adjustment made after October 1, 1999 in the case of a marital annuity
under paragraph (b) of Section 6.1 or under Section 6.2 or surviving spouse
annuity payable pursuant to Section 6.3 to the surviving Spouse of a deceased
Participant, a family annuity payable pursuant to Section 6.2 to a surviving
Dependent Minor Child or Children of a deceased Participant or a surviving
dependent's annuity payable pursuant to Section 6.4 to a surviving Dependent
Disabled Child or Children of a deceased Participant, the adjustment percentage
shall be applied to the first $250 per month of such annuity or benefit, subject
to a maximum monthly adjustment of $350 ($500 in the case of a marital annuity
under paragraph (b) of Section 6.1 or under Section 6.2) or, if the monthly
amount of such annuity or benefit is less than $350 ($500 in the case of marital
annuity under paragraph (b) of Section 6.1 or under Section 6.2), subject to a
maximum monthly adjustment equal to the monthly Service Annuity payment. Cost of
living adjustments with respect to Service Annuities not described in the first
sentence of this Section 5.9(a) shall be determined under the terms of the Plan
as in effect at the time the adjustment was made. Notwithstanding anything
herein to the contrary, the cost of living adjustments provided under this
Section 5.9(a) may be the subject of bargaining between Commonwealth Edison
Company and IBEW Local Union 15 beginning no earlier than the date negotiations
commence regarding the successor agreement to the first collective bargaining
agreement between the parties that expires on or after January 1, 2006.
(c) To determine the amount of the monthly cost of living adjustment
made after October 1, 1999 with respect to any employee who is not described in
paragraph (b), above, to in
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the case of a Service Annuity payable to a Participant pursuant to this Article
5 (relating to Service Annuities) or Article 6 (relating to Service Annuity
forms), the adjustment percentage shall be applied to the first $500 per month
of his or her Service Annuity, computed pursuant to this Article 5 (relating to
Service Annuities), subject to a maximum monthly adjustment of $500 or, if the
monthly amount of such Service Annuity is less than $500 per month, subject to a
maximum monthly adjustment equal to the monthly Service Annuity payment. To
determine the amount of the adjustment made after October 1, 1999 in the case of
a marital annuity under paragraph (b) of Section 6.1 or under Section 6.2 or
surviving spouse annuity payable pursuant to Section 6.3 to the surviving Spouse
of a deceased Participant, a family annuity payable pursuant to Section 6.2 to a
surviving Dependent Minor Child or Children of a deceased Participant or a
surviving dependent's annuity payable pursuant to Section 6.4 to a surviving
Dependent Disabled Child or Children of a deceased Participant, the adjustment
percentage shall be applied to the first $250 per month of such annuity or
benefit, subject to a maximum monthly adjustment of $175 ($250 in the case of a
marital annuity under paragraph (b) of Section 6.1 or under Section 6.2) or, if
the monthly amount of such annuity or benefit is less than $175 ($250 in the
case of marital annuity under paragraph (b) of Section 6.1 or under Section
6.2), subject to a maximum monthly adjustment equal to the monthly Service
Annuity payment. Cost of living adjustments with respect to Service Annuities
not described in the first sentence of this Section 5.9(a) shall be determined
under the terms of the Plan as in effect at the time the adjustment was made.
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ARTICLE 6
SERVICE ANNUITY FORMS
Section 6.1. Basic Service Annuity Form. (a) Unmarried
Participants. A Participant who on his or her Annuity Starting Date is not
married shall receive a Service Annuity payable in semi-monthly payments for the
Participant's lifetime unless the Participant is eligible for and elects an
optional form of Service Annuity under Section 6.2 (relating to optional Service
Annuity forms) at the time and in the manner prescribed by paragraph (b) of
Section 6.6 (relating to election of optional form of Service Annuity).
(b) Married Participants. A Participant who is married on his or her
Annuity Starting Date and does not elect an optional form of Service Annuity
under Section 6.2 (relating to optional Service Annuity forms) at the time and
in the manner prescribed in paragraph (b) of Section 6.6 (relating to election
of optional form of Service Annuity) shall receive in lieu of a Service Annuity
payable in semi-monthly payments for the Participant's lifetime an annual
marital annuity payable in semi-monthly payments for the Participant's lifetime
equal to the Participant's annual Service Annuity computed pursuant to Article 5
(relating to Service Annuities) reduced by the product of (1) 50% of the annual
amount of Service Annuity the Participant would have received under Article 5
(relating to Service Annuities) multiplied by (2) 40% of the applicable factor
set forth in Table D. Thereafter, if the Participant's Spouse shall survive the
Participant, such Spouse shall receive during the remainder of the Spouse's
lifetime an annual Service Annuity payable in semi-monthly payments equal to 50%
of the annual amount of Service Annuity the Participant would have received
under Article 5 (relating to Service Annuities) if the Participant's Service
Annuity were payable in semi-monthly payments for the Participant's lifetime.
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Section 6.2. Optional Service Annuity Forms. Upon written request
to the Committee made at the time and in the manner prescribed in paragraph (b)
of Section 6.6 (relating to election of optional form of Service Annuity), a
Participant may elect to receive, in lieu of the basic Service Annuity form
described in Section 6.1, a Service Annuity in one of the following optional
forms, provided that the Participant is eligible therefor:
Service Annuity Payable for the Life of the Participant: A
Participant who is married on the Participant's Annuity Starting Date may
elect, with spousal consent, to receive, in lieu of the marital annuity
described in paragraph (b) of Section 6.1 (relating to annuities payable
to married Participants), a Service Annuity payable in semi-monthly
payments for the Participant's lifetime.
Optional Marital Annuity: A Participant who is married on the
Participant's Annuity Starting Date may elect to receive a marital annuity
described in paragraph (b) of Section 6.1 (relating to annuities payable
to married Participants) with a Service Annuity payable to the
Participant's Spouse, if the Participant predeceases such Spouse, of a
percentage less than 50 of the Service Annuity the Participant would have
received under Article 5 (relating to Service Annuities) if the
Participant's Service Annuity were payable in semi-monthly payments for
the Participant's lifetime. A marital annuity described in this Section
6.2 shall be payable at the same time and in the same manner as described
in paragraph (b) of Section 6.1 (relating to annuities payable to married
Participants) and shall be computed in the same manner as described in
paragraph (b) of Section 6.1 (relating to annuities payable to married
Participants), except that the lesser percentage of Service Annuity
designated by the Participant shall be used.
Family Annuity: A Participant who is not married on the
Participant's Annuity Starting Date and who, as of such date, has a
Dependent Minor Child or Dependent Minor Children may elect to receive a
family annuity payable in semi-monthly payments for the Participant's
lifetime and, thereafter, payable in semi-monthly payments in equal shares
to each of the Participant's Dependent Minor Children who have not yet
attained age 21. The annual amount of the family annuity payable to the
Participant shall be the Participant's annual Service Annuity computed
pursuant to Article 5 (relating to Service Annuities), reduced by the
product of (1) the annual amount of the family annuity designated by the
Participant for the Participant's surviving Dependent Minor Child or
Children which amount shall be a percentage, not to exceed 50, of the
annual amount of the Participant's Service Annuity computed pursuant to
Article 5 (relating to Service Annuities) multiplied by (2) the applicable
factor set forth in Table E. The annual amount of the family annuity
payable after the Participant's death to the Participant's Dependent Minor
Child or Children who have not yet attained age 21 shall equal the
percentage designated by the Participant, not to exceed 50, of
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the annual amount of the Participant's Service Annuity computed pursuant
to Article 5 (relating to Service Annuities).
Surviving Dependent's Annuity: A Participant who is not married on
the Participant's Annuity Starting Date and who, as of such date, has a
Dependent Disabled Child or Dependent Disabled Children may elect to
receive a surviving dependent's annuity payable in semi-monthly payments
for the Participant's lifetime and, thereafter, payable in semi-monthly
payments in equal shares to each of the Participant's Dependent Disabled
Children who remain disabled. The annual amount of the surviving
dependent's annuity payable to the Participant shall be the Participant's
annual Service Annuity computed pursuant to Article 5 (relating to Service
Annuities) reduced by the product of (1) the annual amount of the
surviving dependent's annuity designated by the Participant for the
Participant's Dependent Disabled Child or Children, which amount shall be
a percentage, not to exceed 50, of the annual amount of the Participant's
Service Annuity computed pursuant to Article 5 multiplied by (2) 50% of
the applicable factor set forth in Table D, such factor to be determined
based on the age of the other parent of such Child or Children, at the
Participant's Annuity Starting Date or the age such other parent would
have attained had such other parent survived or if, in either case, the
age of such other parent cannot be determined, the age of the Participant.
The annual amount of the surviving dependent's annuity payable after the
Participant's death to the Participant's Dependent Disabled Child or
Children who remain disabled shall equal the percentage designated by the
Participant, not to exceed 50, of the annual amount of the Participant's
Service Annuity computed pursuant to Article 5 (relating to Service
Annuities).
Section 6.3. Pre-retirement Surviving Spouse Benefit. (a) Death
Occurring During Employment after Completion of Ten Years of Credited Service.
Except as provided in Section 6.5 (relating to death benefits with respect to
certain Participants who die during employment and after age 65), if the
Termination of Employment of a Participant who completed at least ten years of
Credited Service shall occur by reason of the Participant's death, the
Participant's Spouse, if the Participant is married on the date of the
Participant's death, shall receive a surviving spouse annuity payable in
semi-monthly payments for the surviving Spouse's lifetime commencing on the
Service Annuity payment date immediately following the later of the
Participant's death and the date the Participant would have attained age 65 or,
in the event that the Participant dies prior to attainment of age 65, such
earlier Service Annuity payment date elected by the surviving Spouse in writing
in the manner specified by the Committee. The
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annual amount of such surviving spouse annuity shall be 50% of the annual amount
of the Service Annuity, computed pursuant to Section 5.2 (relating to normal and
deferred retirement), that would have been payable to such Participant (i) had
the Participant terminated employment the day before the Participant's death; or
(ii) in the case of a Participant who dies before attaining age 55, had the
Participant's Service Annuity commenced on the date the Participant would have
attained age 55, in either case, reduced by 2% for each year (computed to the
nearest full year), if any, by which the age of such Participant exceeds that of
the Participant's surviving Spouse. Notwithstanding the preceding sentence, in
no event shall the annual amount of the surviving spouse annuity computed
pursuant to this paragraph (a) of Section 6.3 be less than 50% of the annual
amount of the marital annuity, computed pursuant to paragraph (b) of Section 6.1
(relating to annuities payable to married Participants), that would have been
payable to such Participant (i) had payment of the Participant's marital annuity
commenced the day before the Participant's death or (ii) in the case of a
Participant who dies before attaining age 55, had payment of such marital
annuity commenced at age 55 reduced by 1/2% for each month (but not to exceed
120 months) that the Participant's death precedes the date the Participant would
have attained age 55 had the Participant survived, 1/6% for each month (but not
to exceed 120 months) that the Participant's death precedes the date that the
Participant would have attained age 45 had the Participant survived, and 1/12%
for each month the Participant's death precedes the date that the Participant
would have attained age 35 had the Participant survived.
(b) Death Occurring After Termination of Employment and Completion
of Ten Years of Credited Service. If a Participant who completed at least ten
Years of Credited Service and who is entitled to a deferred Service Annuity
under Section 5.7 (relating to deferred vested termination) shall die before the
Participant's Annuity Starting Date, the Participant's Spouse, if
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the Participant is married on the date of the Participant's death, shall be
entitled to receive a surviving spouse annuity payable in semi-monthly payments
for the surviving Spouse's lifetime commencing on or about the first day of the
month immediately following the later of the date of the Participant's death and
the date the Participant would have attained age 65. Notwithstanding the
preceding sentence, in the case of a Participant described in the preceding
sentence who dies prior to attaining age 65, such Participant's surviving Spouse
may elect, in writing in the manner specified by the Committee, to receive
payment of the surviving spouse annuity on any Service Annuity payment date
following the later of the date of the Participant's death and the date the
Participant would have attained age 50, but in no event later than the first day
of the month immediately following the date the Participant would have attained
age 65. The annual amount of the surviving spouse annuity shall be 50% of the
annual Service Annuity computed pursuant to Section 5.7 (relating to deferred
vested termination), that would have been payable to such Participant (i) had
payment of such deferred Service Annuity commenced the day before the
Participant's death, or (ii) in the case of a Participant who dies before
attaining age 50, had payment of the Participant's deferred Service Annuity
commenced at age 50, in either case, reduced by 2% for each year (computed to
the nearest full year), if any, by which the age of such Participant exceeds the
age of the Participant's surviving Spouse. Notwithstanding the preceding
sentence, in no event shall the annual amount of the surviving spouse annuity
computed pursuant to this paragraph (b) of Section 6.3 be less than 50% of the
annual amount of the marital annuity, computed pursuant to paragraph (b) of
Section 6.1 (relating to annuities payable to married Participants), that would
have been payable to such Participant (i) had payment of the Participant's
marital annuity commenced the day before the Participant's death or (ii) in the
case
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of a Participant who dies before attaining age 50, had payment of such a marital
annuity commenced at age 50.
(c) Death Occurring after Completion of at Least Five Years of
Vesting Service but Less than Ten Years of Credited Service. Except as provided
in Section 6.5 (relating to death benefits with respect to certain Participants
who die during employment and after age 65), if a Participant who has at least
five years of Vesting Service but less than ten years of Credited Service shall
die prior to the Participant's Annuity Starting Date, the Participant's Spouse,
if the Participant is married on the date of the Participant's death, shall be
entitled to receive a surviving spouse annuity payable in semi-monthly payments
for the surviving Spouse's lifetime commencing on or about the first day of the
month immediately following the later of the date of the Participant's death and
the date the Participant would have attained age 65. Notwithstanding the
preceding sentence, the surviving Spouse of a Participant who is described in
the preceding sentence and who dies before the Participant's 65th birthday may
elect, in writing in the manner specified by the Committee, to receive payment
of the surviving spouse annuity on any Service Annuity payment date following
the later of the date of the Participant's death and the date the Participant
would have attained age 60, but in no event later than the first day of the
month immediately following the date the Participant would have attained age 65.
The annual amount of the surviving spouse annuity shall be 50% of the annual
Service Annuity computed pursuant to Section 5.7 (relating to deferred vested
termination) that would have been payable to such Participant had payment of
such deferred Service Annuity commenced at age 65, in either case, reduced by 2%
for each year (computed to the nearest full year), if any, by which the age of
such Participant exceeds the age of the Participant's surviving Spouse.
Notwithstanding the preceding sentence, in no event shall the annual amount of
the surviving spouse annuity computed pursuant
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to this paragraph (c) of Section 6.3 be less than 50% of the annual amount of
the marital annuity, computed pursuant to paragraph (b) of Section 6.1 (relating
to annuities payable to married Participants) that would have been payable to
such Participant had payment of such marital annuity commenced at age 65.
Except as provided in Section 6.4 (relating to pre-retirement
surviving Child benefits) or Section 6.5 (relating to death benefits with
respect to certain Participants who die during employment and after age 65), no
Service Annuity or other benefit shall be payable under this Plan with respect
to a Participant who dies prior to the Participant's Annuity Starting Date and
who on the date of the Participant's death has no surviving Spouse. In addition,
except as provided in Section 6.5 (relating to death benefits with respect to
certain Participants who die during employment and after age 65), no Service
Annuity or other benefit shall be payable under this Plan with respect to a
Participant who dies prior to completion of at least five years of Vesting
Service.
Section 6.4. Pre-retirement Surviving Child Benefits. In the event
of the death of any Participant who (i) has at least ten years of Credited
Service and (ii) has on file with the Plan Administrator either a family annuity
or a surviving dependent's annuity, then, except as provided in Section 6.5
(relating to death benefits with respect to certain Participants who die during
employment and after age 65), such Participant's surviving Dependent Minor
Children or Dependent Disabled Children, as the case may be, shall receive a
surviving child annuity payable in semi-monthly payments commencing on the
Service Annuity payment date immediately following the Participant's death and
ending with the Service Annuity payment for the period next preceding the date
on which (i) in the case of a family annuity, all of the Participant's Children
have attained age 21 and (ii) in the case of a surviving dependent's annuity,
all of the
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Participant's Children cease to be Dependent Disabled Children. The annual
amount of such surviving child annuity shall be the annual annuity the
Participant's Child or Children would have received (i) had the Participant
terminated employment on the date of the Participant's death under circumstances
entitling the Participant to a Service Annuity under Section 5.2 (relating to
Normal and Deferred Retirement) or Section 5.3 (relating to Early Retirement)
and died subsequently, or (ii) in the case of a Participant who dies before
attaining age 55, had the Participant terminated employment at age 55 under
circumstances entitling the Participant to a Service Annuity under Section 5.3
(relating to Early Retirement) and died subsequently, in either case, reduced by
2% for each year (computed to the nearest full year), if any, by which the age
of such Participant exceeds the age of the other parent of such Child or
Children at the Participant's death or the age such other parent would have
attained on such date had such other parent survived or if, in either case, the
age of such other parent cannot be determined, the age shall be deemed to be the
same as the Participant.
Section 6.5. Death Benefits for Spouse or Child of Participant Who
Dies During Employment After Age 65. Notwithstanding any provision of this Plan
to the contrary, in the event of the death of any Participant who (a) has
attained age 65 and (b) on the date of his or her death the Participant is
married or has on file with the Plan Administrator an election for a family
annuity or a surviving dependent's annuity, the Participant's surviving Spouse
or Dependent Minor Children, as the case may be, shall receive the annuities
they would have received had the Participant terminated employment on the date
of the Participant's death under circumstances entitling the Participant to a
Service Annuity under Section 5.2 (relating to Normal and Deferred Retirement)
and died subsequently, or, in the case of a surviving Spouse, a surviving spouse
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annuity computed pursuant to the applicable paragraph of Section 6.3 (relating
to pre-retirement surviving spouse benefits), if greater.
Section 6.6. Election Procedure. (a) Notice of Availability of
Elections. No less than 30 days and no more than 90 days before the
Participant's Annuity Starting Date, the Committee shall give the Participant by
mail or personal delivery written notice in nontechnical language that, if the
Participant is eligible, the Participant may elect an optional form of Service
Annuity set forth in Section 6.2 (relating to optional Service Annuity forms).
Notwithstanding the preceding sentence, the Committee may deliver such notice to
the Participant less than 30 days before the Participant's Annuity Starting Date
or after the Participant's Annuity Starting Date, provided that (i) the
Participant and the Participant's spouse (if any) waive any requirement that
such notice be provided no less than 30 days before the Participant's Annuity
Starting Date and (ii) payment of the Participant's Service Annuity commences
more than 7 days after such notice is received by the Participant. The notice
referred to herein shall include (i) a general description of the Service
Annuity forms provided under this Plan, the eligibility requirements for such
Service Annuity forms and the circumstances under which the basic Service
Annuity form set forth in Section 6.1 (relating to the basic Service Annuity
form of payment) will be provided unless a Participant, with the consent of the
Participant's Spouse (if any), elects otherwise and (ii) general information on
the relative financial effect upon a Participant's Service Annuity if the
Participant elects an optional form of Service Annuity or revokes any prior
election. Such notice shall also advise the Participant that upon written
request to the Committee prior to the end of the election period set forth in
paragraph (b) of this Section 6.6 the Participant will be given a written
explanation in nontechnical language of the terms and conditions of the Service
Annuity forms provided under this Plan and the financial effect, in
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terms of dollars per payment, upon the Participant's Service Annuity if the
Participant elects an optional form of Service Annuity. Such explanation shall
be mailed or personally delivered to the Participant within 30 days from the
date the Participant's written request is received by the Committee and,
notwithstanding the provisions of paragraph (b) of this Section 6.6, the
election period set forth in such paragraph shall not end until the 60th day
following the date such explanation is mailed or personally delivered to the
Participant, unless the Participant waives such period as described in such
paragraph.
(b) Election of Optional Form of Service Annuity. Subject to the
terms of, and except as otherwise provided by, this paragraph, a Participant
may, at any time during the 90-day period ending on the Participant's Annuity
Starting Date, elect, change or revoke (i) any form of Service Annuity provided
under this Plan and (ii) the percentage of the Participant's Service Annuity to
be paid to a Spouse under a marital annuity, to a Dependent Minor Child under a
family annuity or to a Dependent Disabled Child under a surviving dependent's
annuity. Notwithstanding the preceding sentence, if the written notice described
in paragraph (a) of this Section 6.6 is delivered to the Participant within 30
days of, or after, the Participant's Annuity Starting Date, the Participant may
make an election, change or revocation as described in the preceding sentence at
any time within 30 days after the date the written notice described in paragraph
(a) of this Section 6.6 is delivered to the Participant. The Participant and the
Participant's Spouse, if any, may waive the 30 day period described in the
preceding sentence and begin receiving payment of the Participant's Service
Annuity prior to the expiration of such 30-day period, provided that
distribution of the Participant's Service Annuity commences more than 7 days
after the notice described in paragraph (a) of this Section 6.6 is delivered to
the Participant. An election, change or revocation described in this paragraph
(b) shall be made by
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delivering a written notice describing the election, change or revocation to the
Committee. Notwithstanding the foregoing, if the Participant is married on the
Participant's Annuity Starting Date, the Participant's election to receive an
optional form of Service Annuity under Section 6.2 (relating to optional Service
Annuity forms) in lieu of the marital annuity described in paragraph (b) of
Section 6.1 (relating to annuities payable to married Participants) shall not be
effective unless (i) it shall have been consented to at the time of such
election in writing by the Participant's Spouse and such consent acknowledges
the effect of such election and is witnessed by either a Plan representative or
a notary public, or (ii) it is established to the satisfaction of a Plan
representative that such consent cannot be obtained because the Participant's
Spouse cannot be located or because of such other circumstances as may be
prescribed in Regulations. An election of an optional Service Annuity form shall
be deemed a rejection of the basic Service Annuity form provided in Section 6.1
(relating to the basic Service Annuity form of payment). The consent of a Spouse
required by this paragraph shall not be necessary for a distribution required by
a qualified domestic relations order described in paragraph (b) of Section 13.2.
(c) Automatic Cancellation of Elections. If a Participant's Service
Annuity is payable in the form of a marital annuity and if, prior to the
Participant's Annuity Starting Date, the Participant's spouse dies or the
Participant and such spouse divorce, the Participant's election or deemed
election to receive a marital annuity shall, upon the Participant's notice to
the Committee of such death or divorce, be automatically cancelled, unless,
subsequent to such spouse's death or the Participant's divorce and prior to the
Participant's Annuity Starting Date, the Participant remarries and notice of
such new marriage is delivered to the Committee.
If a Participant's Service Annuity is payable in the form of a
marital annuity and if, after the Participant's Annuity Starting Date, the
Participant's Spouse predeceases the
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Participant or the Participant's Spouse, pursuant to a duly entered divorce
decree, specifically relinquishes all rights to receive any Service Annuity in
the event of the Participant's death, the Participant's Service Annuity shall be
recomputed prospectively as if the Participant were not married on the Annuity
Starting Date. Any marriage by the Participant after the Participant's Annuity
Starting Date shall not affect the payment of the Participant's Service Annuity
or require any payment to the Participant's new spouse.
If a Participant has elected to receive a family annuity and, either
before or after payment of such annuity commences, all of the Participant's
previously Dependent Minor Children have predeceased the Participant or have
ceased to be dependent, within the meaning of Section 152 of the Code, the
Participant's election to receive a family annuity shall, upon the Participant's
notice to the Committee of such death or cessation of being a dependent, be
automatically cancelled.
If a Participant has elected to receive a surviving dependent's
annuity and either before or after payment of such annuity commences, all of the
Participant's previously Dependent Disabled Children have predeceased the
Participant or have ceased to be Dependent Disabled Children, as certified by
the medical director of the Company or by such other licensed physician
designated by the Company, the Participant's election to receive a surviving
dependent's annuity shall, upon the Participant's notice to the Committee of
such death or cessation of being a Dependent Disabled Child, be automatically
cancelled.
A Participant whose election has been automatically cancelled
pursuant to this paragraph (c) shall be entitled to receive the Service Annuity
described in Section 6.1 (relating to the basic Service Annuity form of payment)
or, in the case of an election that is automatically cancelled prior to the
Participant's Annuity Starting Date and subject to Section 6.1 (relating to
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the basic Service Annuity form of payment), such other form of Service Annuity
described in Section 6.2 (relating to optional Service Annuity forms) for which
the Participant is eligible and elects in accordance with this Section 6.6.
Section 6.7. Lump-Sum Payments. Notwithstanding anything herein to
the contrary, if the monthly amount of any Service Annuity shall initially be or
at any time become $10 or less, the Participant, Beneficiary or Retiree may, in
lieu of such annuity, elect to receive, and within 30 days after such election
there shall be paid to such Participant, Beneficiary or Retiree, an amount equal
to the lump sum equivalent of such annuity calculated on the basis of the
"applicable interest rate" as defined in Section 417 of the Code and the
Regulations promulgated thereunder and the applicable mortality table.
In the case of a distribution pursuant to this Section 6.7 that is
an "eligible rollover distribution" within the meaning of Section 402 of the
Code and that is at least $200, the Participant or the Participant's surviving
Spouse may elect that all or any portion of such distribution to which such
Participant or surviving Spouse is entitled shall be directly transferred as a
rollover contribution from the Service Annuity Fund to (i) an individual
retirement account described in Section 408(a) of the Code, (ii) an individual
retirement annuity described in Section 408(b) of the Code, (iii) an annuity
Plan described in Section 403(a) of the Code, or (iv) another Plan qualified
under Section 401(a) of the Code (the terms of which permit the acceptance of
rollover distributions) (provided, however, that a surviving Spouse of a
Participant may only elect to have such distribution transferred directly to an
individual retirement account or individual retirement annuity). Notwithstanding
the foregoing, a Participant or the Participant's surviving Spouse shall not be
entitled to elect to have less than the total amount of such distribution
transferred as a rollover contribution unless the amount to be transferred
equals
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at least $500. At least 30 days but no more than 90 days prior to the date on
which the Participant or the Participant's surviving Spouse is entitled to
receive a distribution described in this Section 6.7, a written explanation
shall be provided to the Participant or the Participant's surviving Spouse of
the availability of the direct rollover option, the rules that require income
tax withholding on distributions, the rules under which the Participant or the
Participant's surviving Spouse may roll over the distribution within 60 days of
receipt and, if applicable, other special tax rules that may apply to the
distribution.
Section 6.8. Distributions to Dependent Minor and Disabled
Children. Any distribution under this Plan to a Dependent Minor Child or
Dependent Disabled Child, or payment to any person for the account of a
Dependent Minor Child or Dependent Disabled Child, as the case may be, shall
discharge all obligations in respect of such payment, and none of the Company,
the Trustees or the Committee shall have any duty to see to the application by
any third party of any distribution made to or for the benefit of such Dependent
Minor Child or Dependent Disabled Child.
ARTICLE 7
LIMITATIONS ON BENEFITS
Section 7.1. Maximum Annual Benefits. Notwithstanding any other
provision of this Plan to the contrary, in any Plan Year, the amount of a
Participant's projected annual benefit under this Plan shall be limited to an
amount such that (i) such projected annual benefit and the aggregate projected
annual benefit of the Participant under all other defined benefit plans
maintained by an Employer or any other Affiliate does not exceed the lesser of:
(A) the product of the Participant's years of Credited Service, not
in excess of ten, multiplied by $9,000 (as increased to reflect the cost
of living adjustments provided under Section 415 of the Code), and
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(B) the product of the Participant's years of Vesting Service, not
in excess of ten, multiplied by an amount equal to 10% of the
Participant's average compensation for the three consecutive calendar
years in which the Participant's compensation was the highest and which
are included in the Participant's period as an active Participant in the
Plan,
and (ii) with respect to limitation years beginning before January 1, 2000, the
sum of (C) and (D) below does not exceed 1.
(C) The sum of the projected annual benefit provided under this Plan
and the aggregate projected annual benefit of the Participant under all
other defined benefit plans maintained by an Employer or any other
Affiliate (determined as of the close of the Plan Year), divided by the
lesser of
(I) 125% of the maximum dollar limitation contained in Section
415(b)(1)(A) of the Code, as adjusted for increases in the cost of
living as set forth in Regulations, and
(II) 140% of the average of the Participant's compensation for
the three consecutive calendar years during which the Participant's
compensation was the highest.
(D) The aggregate annual additions to the Participant's accounts in
all defined contribution plans maintained by an Employer or any other
Affiliate for all of the Participant's years of Credited Service
(determined as of the close of the Plan Year), divided by the sum computed
by (1) determining for each of such Participant's years of Credited
Service the lesser of
(I) 125% of the maximum dollar amount which under Section
415(c)(1)(A) of the Code could have been contributed on behalf of
the Participant to a defined contribution plan, and
(II) 35% of the Participant's annual compensation,
and (2) adding together all of such lesser amounts so determined.
The dollar amount set forth in clause (A) of the first paragraph of
this Section 7.1 shall be actuarially reduced pursuant to Regulations prescribed
for such purpose by the Secretary of the Treasury if pension benefits commence
prior to the Participant's "social security retirement age" (as defined below).
If a Participant's pension benefits commence after the Participant attains his
or her social security retirement age, such dollar amount shall be increased to
the actuarial equivalent thereof pursuant to Regulations prescribed for such
purpose by the
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Secretary of the Treasury, by using the lesser of the interest rate provided
under this Plan and 5% per annum. A Participant's "social security retirement
age" shall be the age used as the retirement age for a Participant under Section
216(1) of the Federal Social Security Act, except that such section shall be
applied without regard to the age increase factor and as if the early retirement
age under Section 216(1)(2) of such Act was 62.
If the current accrued benefit (as defined in the following
sentence) of a Participant who was participating as of January 1, 1987 in a
defined benefit plan or plans maintained by the Employer exceeds the number
computed in the first paragraph of this Section 7.1, as adjusted by the second
paragraph of this Section 7.1, then the current accrued benefit of such
Participant shall be substituted for the number computed in the first paragraph
of this Section 7.1. For purposes of the preceding sentence, "current accrued
benefit" shall mean a Participant's accrued pension under the plan determined as
if the Participant has separated from service as of December 31, 1986, when
expressed as an annual benefit within the meaning of Section 415(b)(2) of the
Code; provided, however, that in determining a Participant's accrued benefit,
the following shall be disregarded: (1) any change in the terms and conditions
of the Plan after May 5, 1986, and (2) any cost of living adjustment occurring
after May 5, 1986.
If the limitation set forth in clause (ii) of the first paragraph of
this Section 7.1 would otherwise be exceeded for a Plan Year, then the excess
shall be eliminated by reducing the aggregate projected annual benefit of the
Participant being funded for such Plan Year under this Plan and any other
defined benefit plan maintained by his or her Employer to the extent necessary
to eliminate such remaining excess.
A Participant's "projected annual benefit" under this Plan for any
Plan Year is the annual Service Annuity which such Participant will be entitled
to receive from this Plan
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assuming the Participant continues to be an Employee until the Participant is
entitled to a Service Annuity, the Participant's compensation continues at the
same rate in future Plan Years as in effect at the time of reference and all
other relevant factors used to determine the Participant's Service Annuity under
this Plan remain in future Plan Years as in effect at the time of reference. The
"projected annual benefit" of a person who was previously an Employee and who is
eligible to receive a Service Annuity is the annual amount of such Service
Annuity. If a Service Annuity is or will be in a form other than a single life
annuity or a qualified joint and survivor annuity (within the meaning of Section
417(b) of the Code), then for purposes of determining a person's projected
annual benefit and applying the above limitations, such Service Annuity shall be
adjusted to a single life annuity which is the actuarial equivalent of such
other form of pension. A person's "projected annual benefit" under any other
defined benefit plan maintained by the Participant's Employer shall be as
determined pursuant to the provisions of Section 415 of the Code and the terms
of such plan.
For purposes of this Section 7.1, the terms "annual addition,"
"compensation," "defined contribution plan," "defined benefit plan" and "year of
service" shall have the meanings set forth in Section 415 of the Code and the
Regulations promulgated thereunder.
Section 7.2. Temporary Restrictions on Benefits in Case of
Termination or Curtailment. This Section 7.2 sets forth restrictions required by
the Internal Revenue Service on the Service Annuity payable for a Plan Year to a
highly compensated employee or highly compensated former employee, as described
in Section 414(q) of the Code and Regulations who is among the twenty-five
highest paid nonexcludable employees in the service of the Employers for the
Plan Year. The restrictions set forth in this Section 7.2 shall not become
applicable if:
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(1) after payment to such highly compensated employee of any Service
Annuity, the value of Plan assets equals or exceeds 110 percent of the
value of current liabilities (as defined in Section 412(l)(7) of the
Code),
(2) the value of the Service Annuity paid to such highly compensated
employee is less than one percent of the value of current liabilities of
the Plan, or
(3) the value of the Service Annuity payable to or on behalf of such
highly compensated employee does not exceed the amount described in
Section 411(a)(11)(A) of the Code.
If the Service Annuity payable to a Participant is subject to the
restrictions set forth in this Section 7.2, the Service Annuity provided from
the Plan shall not exceed the payments that would be made on behalf of such
Participant under a single life annuity that is the actuarial equivalent of the
sum of the Participant's Service Annuity and the Participant's other benefits
under the Plan.
The foregoing conditions do not restrict the full payment of any
death or survivor's benefits on behalf of a Participant who dies while the Plan
is in full effect and its full current costs have been met.
Any amounts that become due but because of the limitations of this
Section 7.2, if applicable, cannot be made available to or for the Participant
(either currently or later) shall be applied to reduce subsequent contributions
of the Employers; but if the Employers have ceased contributions to the Plan,
such amounts shall be applied for the benefit of Participants not affected by
this Section 7.2 in an equitable and nondiscriminatory manner.
This Section 7.2 is inserted solely for the purpose of complying
with the requirements of the Internal Revenue Service and shall not be applied
except to the extent necessary to comply with such requirements.
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ARTICLE 8
SERVICE ANNUITY FUND
The Service Annuity Fund is the Service Annuity Fund created by the
Company for the payment of Service Annuities. All contributions under this Plan
shall be paid to the Trustee. The Trustee shall hold all monies and other
property received by it and shall invest and reinvest the same, together with
the income therefrom, on behalf of the Participants collectively in accordance
with the provisions of the Service Annuity Fund. The Trustee shall be a "named
fiduciary" under the Plan for purposes of ERISA and, as such, may, in its
discretion, delegate to one or more investment managers, as defined in ERISA,
the authority to hold, manage, acquire and dispose of all or any part of the
Service Annuity Fund. Any investment manager appointed by the Trustee pursuant
to this Article 8 which is a bank or trust company supervised by a State or
Federal agency is authorized and empowered to invest and reinvest all or any
part of the Service Annuity Fund allocated to it for investment in any common,
collective or commingled trust qualified under the provisions of Section 401(a)
and exempt from tax under Section 501(a) of the Code which is maintained by such
investment manager ("common Trust"). During such period of time as all or any
portion of the Service Annuity Fund shall be invested in a common trust, the
trust document governing such common trust shall govern any investment therein
and such trust document shall be a part hereof. Investment of the common trust
in deposits of the trustee of the common trust is hereby expressly authorized.
In addition, the Trustees of the Service Annuity Fund are authorized
and empowered to invest and reinvest all or any part of the Service Annuity Fund
in the Commonwealth Edison Pooled Fund (the "Pooled Fund"). During such period
of time as all or any portion of the Service Annuity Fund is invested in the
Pooled Fund, the trust document
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governing the Pooled Fund shall govern any investment therein and such trust
document shall be a part hereof. The trustees of the Pooled Fund who are members
of the Investment Committee established thereunder shall be "named fiduciaries"
under the Plan for purposes of ERISA and, in their discretion, may delegate to
one or more investment managers, as defined in ERISA, the authority to hold,
manage, acquire and dispose of all or any part of the Service Annuity Fund
invested in the Pooled Fund.
The Trustee shall make distributions from the Service Annuity Fund
at such time or times to such person or persons and in such amounts as the
Committee shall direct in accordance with this Plan.
ARTICLE 9
SPECIAL RULES RELATING TO PARTICIPATION OF AND DISTRIBUTION TO
CERTAIN TERMINATED EMPLOYEES
Section 9.1. Employment After Commencement of Service Annuity. A
retired Employee or former Employee, other than an Employee described in the
next following paragraph, receiving a Service Annuity may be employed in any
business, including that of an Employer or an Affiliate, without in any way
affecting the payment to him or her of his or her Service Annuity, provided
however, that his or her service with an Employer or an Affiliate shall be
temporary and under such rules as the Committee may adopt.
A retired bargaining unit Employee or former bargaining unit
Employee, if such bargaining unit Employee was a member of Local Union 15 (or a
predecessor union), International Brotherhood of Electrical Workers, receiving a
Service Annuity may be employed in any business, other than that of the Company,
without in any way affecting the payment to him or her of his or her Service
Annuity. Such retired bargaining unit Employee, or former
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bargaining unit Employee, receiving a Service Annuity may be employed in the
temporary service of an Employer or an Affiliate, but, except as otherwise
provided in paragraph (b) of Section 5.2, during the term of such employment, he
or she shall not receive any Service Annuity payments unless such employment is
for less than 40 Hours of Service per calendar month. Upon the conclusion of
such temporary service employment, Service Annuity payments shall again be made
to him or her in the same basis as before his or her temporary service
employment.
Section 9.2. Social Security Increases. The Service Annuity of a
Retiree or a Participant who has terminated employment under circumstances that
entitle the Participant to a deferred Service Annuity under Section 5.7
(relating to deferred vested termination) shall not be recomputed to reflect any
change in the benefit levels payable under Title II of the Federal Social
Security Act or any change in the wage base under such Title II if such change
takes place after the earlier of the date payment of such Service Annuity
commences or the date of such termination, as the case may be.
Section 9.3. Leased Employees. A leased employee (within the
meaning of section 414(n)(2) of the Code) shall not be eligible to participate
in the Plan. If a person who performed services as a leased employee (within the
meaning of Section 414(n)(2) of the Code) of any Employer or Affiliate becomes
an Employee, or if an Employee becomes such a leased employee, then any period
during which such services were so performed shall be taken into account solely
for the purposes of determining whether and when such person is eligible to
participate in this Plan under Article 3 (relating to participation), measuring
such person's years of Vesting Service and determining when such person has
terminated his or her employment for purposes of Article 5 (relating to Service
Annuities) and Article 6 (relating to Service Annuity
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forms) to the same extent it would have been had such service been as an
Employee. This Section 9.3 shall not apply to any period of service during which
such a leased employee was covered by a plan described in Section 414(n)(5) of
the Code and during which the total number of leased employees did not
constitute more than 20% of the Employer's non-highly compensated work force
within the meaning of Section 414(n)(1)(C)(ii) of the Code.
Section 9.4. Suspension of Service Annuities for Participants who
Remain Employed After Normal Retirement Age. Notwithstanding anything contained
in the Plan to the contrary and except as provided in paragraph (b) of Section
5.2 (relating to special rule for Participants who attain age 70-1/2 while
employed), a Participant who remains an Employee after the Participant's Normal
Retirement Age without having any Termination of Employment that results in the
Participant beginning to receive his or her Service Annuity shall be notified by
the Committee, in writing by personal delivery or certified mail, during the
calendar month during which the Participant's Normal Retirement Age occurs, that
the Participant shall not be entitled to receive any Service Annuity for any
calendar month of employment by an Employer or an Affiliate during which the
Participant completes at least 40 Hours of Service. The Service Annuity of such
a Participant or the Participant's Beneficiary shall be actuarially increased to
reflect the Service Annuity payable to such Participant pursuant to Article 5
(relating to Service Annuities), determined without regard to this Section 9.4,
for any calendar month during which the Participant does not complete 40 Hours
of Service, but shall not be actuarially adjusted for any delay in the
commencement of payment of the Participant's Service Annuity.
Section 9.5. Reemployment Before Commencement of Service Annuity.
(a) Employees Represented by IBEW Local Union 15. The following rules shall
apply to an Eligible Employee who is a member of a collective bargaining unit
represented by IBEW Local
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Union 15 who incurs a Termination of Employment and who is rehired by an
Employer prior to commencing his or her Service Annuity or any benefits under
the Exxon Corporation Cash Balance Pension Plan for Bargaining Unit Employees:
(i) Rehire Date Before Absence of 5 Years. If an Employee terminates
employment and is later rehired by an Employer before having an absence
from employment with the Employers and their Affiliates of five years and,
on the date of such Employee's rehire, the Employee is a member of a
collective bargaining unit represented by IBEW Local Union 15, then
either: (1) if such Employee was a Participant on the date his or her
employment terminated, such Employee shall become a Participant in the
Plan as of his or her rehire date or (2) if such Employee was not a
Participant on the date his or her employment terminated, such Employee
shall not be an Eligible Employee and shall not become a Participant.
(ii) Rehire Date After Absence of at Least 5 Years. If an Eligible
Employee terminates employment, regardless of whether such Eligible
Employee was a Participant on the date that his or her employment
terminated, and is later rehired by an Employer after having an absence
from employment with the Employers and their Affiliates of at least five
years and, on the date of such Employee's rehire, the Employee is a member
of a collective bargaining unit represented by IBEW Local Union 15, such
Eligible Employee shall (A) if he or she was a Participant with a vested
Service Annuity as of his or her termination date, become a Participant as
of his or her rehire date, (B) if he or she was not a Participant as of
his or her termination date and was a participant entitled to a vested
benefit under the Exxon Corporation Cash Balance Pension Plan for
Bargaining Unit Employees as of his or her termination date, he or she
shall not be an Eligible Employee and shall not become a Participant, or
(C) if he or she was neither a Participant with a vested Service Annuity
nor a participant entitled to a vested benefit under the Cash Balance
Pension Plan for Bargaining Unit Employees as of his or her termination
date, be permitted to elect, in accordance with procedures established by
the Committee, to participate in the Plan or the Exelon Corporation Cash
Balance Pension Plan for Bargaining Unit Employees as of his or her rehire
date.
(b) Management Employees. The following rules shall apply to an
Eligible Employee who is not a member of a collective bargaining unit
represented by IBEW Local Union 15 and who is rehired by an Employer after a
Termination of Employment and prior to commencing his or her Service Annuity or
any benefits under the Exelon Corporation Cash Balance Pension Plan, as
applicable:
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(i) Rehire Date Before Absence of 5 Years. If an Employee terminates
employment and is later rehired by an Employer before having an absence
from employment with the Employers and their Affiliates of five years and,
on the date of his or her rehire, such Employee is not a member of a
collective bargaining unit represented by IBEW Local Union 15, then
either: (1) if such Employee was a Participant on the date his or her
employment terminated, such Employee shall be Participant in the Plan as
of his or her rehire date if he or she is then an Eligible Employee or (2)
if such Employee was not a Participant on the date his or her employment
terminated, such Employee shall not be an Eligible Employee and shall not
become a Participant. Notwithstanding clause (1) of the preceding
sentence, if an Eligible Employee described in the preceding sentence was
not at any time permitted to make the election described in Section 3.2(a)
or was permitted to make such election and elected to participate in the
Exelon Corporation Cash Balance Pension Plan but such election was not
given effect as a result of such Employee's Termination of Employment,
such Eligible Employee shall be permitted to elect, in the time and manner
prescribed by the Committee, to either (1) participate in the Plan as of
his or her rehire date or (2) participate in the Exelon Corporation Cash
Balance Pension Plan at the time prescribed therein and have his or her
Service Annuity and related assets transferred to such plan in the manner
described in Section 3.2(b).
(ii) Rehire Date After Absence of at Least 5 Years. If an Employee
terminates employment with the Employers and their Affiliates and the
Employee was not a Participant or was a Participant who did not have a
vested Service Annuity as of the date his or her employment terminated,
and such Employee is rehired by an Employer after having an absence from
employment with the Employers and their Affiliates of at least five years
and, on the date of his or her rehire, such Employee is not a member of a
collective bargaining unit represented by IBEW Local Union 15, such
Employee shall not be an Eligible Employee and shall not become a
Participant upon such rehire. If a Participant with a vested Service
Annuity terminates employment with the Employers and their Affiliates and
the Participant is rehired after having an absence from employment with
the Employers and their Affiliates of at least five years, such
Participant shall remain a Participant upon his or her rehire.
Notwithstanding the preceding sentence if a Participant described in the
preceding sentence was not at any time permitted to make the election
described in Section 3.2(a) or was permitted to make such election and
elected to participate in the Exelon Corporation Cash Balance Pension Plan
but such election was not given effect as a result of such Employee's
Termination of Employment, such Eligible Employee shall be permitted to
elect, in the time and manner prescribed by the Committee, to either (1)
participate in the Plan as of his or her rehire date or (2) participate in
the Exelon Corporation Cash Balance Pension Plan at the time prescribed
therein and have his or her Service Annuity and related assets transferred
to such plan in the manner described in Section 3.2(b).
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Section 9.6. Employees whose Representation by IBEW Local Union 15
Changes. If an Employee who, on the day he or she first performed an Hour of
Service with an Employer, was not a member of a collective bargaining unit
represented by IBEW Local Union 15 and was not an Eligible Employee later
becomes an Eligible Employee as a result of becoming a member of a collective
bargaining unit represented by IBEW Local Union 15 and being employed at a
facility that, as of October 19, 2000, was owned by Commonwealth Edison Company,
Unicom Corporation or any affiliate of Unicom Corporation, such Employee shall
become a Participant as of the date he or she first becomes a member of a
collective bargaining unit represented by IBEW Local Union 15, provided that
such Employee does not elect, in the time and manner prescribed by the Committee
for such an election, to participate in the Exelon Corporation Cash Balance Plan
for Bargaining Unit Employees. If an Employee who was a member of a collective
bargaining unit represented by IBEW Local Union 15 and who first became employed
by an Employer prior to January 1, 2001 later ceases to be a member of a
collective bargaining unit represented by IBEW Local Union 15, such Employee
shall be permitted to elect, in the time and manner prescribed by the Committee,
to either (a) continue to participate in the Plan as of the date he or she
ceases to be a member of a collective bargaining unit represented by IBEW Local
Union 15 or (b) participate in the Exelon Corporation Cash Balance Pension Plan
at the time prescribed therein and have his or her Service Annuity and related
assets transferred to such plan in the manner described in Section 3.2(b).
Section 9.7. Transfer of Employment to or Reemployment in Positions
Eligible for Participation in the Plan or the Service Annuity Plan of PECO
Energy Company by Certain Individuals Who Were Participants in Such a Plan on
December 31, 2000. If a Participant who was a Participant on December 31, 2000
transfers employment to or is reemployed by an
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Employer or an Affiliate in a job classification with respect to which similarly
situated employees of such Employer or Affiliate are not eligible to participate
in the Plan but are instead eligible to participate in the Service Annuity Plan
of PECO Energy Company (or would be so eligible but for their election to
participate in the Exelon Corporation Cash Balance Pension Plan), then such
individual shall upon such transfer or reemployment remain a Participant in the
Plan and shall not participate in the Service Annuity Plan of PECO Energy
Company. If a participant in the Service Annuity Plan of PECO Energy Company who
was a participant in such plan on December 31, 2000 transfers employment to or
is reemployed by an Employer or an Affiliate in a management job classification
with respect to which similarly situated employees of such Employer or Affiliate
are not eligible to participate in such plan but are instead eligible to
participate in the Plan (or would be so eligible but for their election to
participate in the Exelon Corporation Cash Balance Pension Plan), then such
individual shall upon such transfer or reemployment remain a participant in the
Service Annuity Plan of PECO Energy Company and shall not participate in the
Plan.
ARTICLE 10
ADMINISTRATION
Section 10.1. The Committee. (a) the Company shall be the
"administrator" and a "named fiduciary" of this Plan within the meaning of such
terms as used in ERISA. The board of directors of the Company shall choose
annually at least three persons, one of whom shall be named Chairman, who shall
act and be known as the Service Annuity Committee. The members of the Committee
shall be "named fiduciaries" under the Plan for purposes of ERISA and shall have
general responsibility, except for duties specifically vested in the Trustee,
for the administration of the Plan. The Committee shall make to the board of
directors of the Company
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such reports of the operations of the Plan, at such time and in such form, as
the board may direct. The board of directors of the Company shall have the right
at any time, with or without cause, to remove any member or members of the
Committee. A member of the Committee may resign and such member's resignation
shall be effective upon delivery of such member's written resignation to the
Company. Upon the resignation, removal or failure or inability for any reason of
any member of the Committee to act hereunder, the board of directors of the
Company shall appoint, for the unexpired term, a successor member, provided that
the Committee shall at all times consist of at least five members. All successor
members of the Committee shall have all the rights, privileges and duties of
their predecessors, but shall not be held accountable for the acts of their
predecessors.
(b) No member of the Committee who is a Participant shall take part
in any action of the Committee or any matter involving solely such member's
rights under this Plan.
(c) Promptly after the appointment of the members of the Committee
and from time to time thereafter and promptly after the appointment of any
successor member of the Committee, the Trustee shall be notified as to the names
of the persons appointed as members or successor members of the Committee by
delivery to the Trustee of a certified copy of the resolution of the board of
directors of the Company making such appointment or by such other instrument as
may be acceptable to the Trustee.
(d) The Committee shall have the duty and authority to interpret and
construe this Plan in regard to all questions of eligibility, the status and
rights of Participants, Retirees, Beneficiaries and other persons under this
Plan, and the manner, time, and amount of payment of any distributions under
this Plan. The determination of the Committee with respect to an Employee's
years of Credited Service, the amount of the Employee's Earnings, Highest
Average
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Annual Pay, Federal Benefit and any other matter affecting payments under the
Plan shall be final and binding. Benefits under the Plan shall be paid to a
Participant or Beneficiary only if the Committee, in its discretion, determines
that such person is entitled to benefits.
(e) Each Employer shall, from time to time, upon request of the
Committee, furnish to the Committee such data and information as the Committee
shall require in the performance of its duties.
(f) The Committee shall direct the Trustee to make payments of
amounts to be distributed from the Trust under Article 6 (relating to Service
Annuity forms). In addition, it shall be the duty of the Committee to certify to
the Trustee the names and addresses of all Retirees, the amounts of all Service
Annuities, the dates of death of Retirees and all proceedings and acts of the
Committee necessary or desirable for the Trustees to be fully informed as to the
Service Annuities to be paid out of the Service Annuity Fund.
(g) The members of the Committee may allocate their responsibilities
among themselves and may designate any person, partnership or corporation to
carry out any of their responsibilities. Any such allocation or designation
shall be reduced to writing and such writing shall be kept with the records of
the meetings of the Committee.
(h) The Committee may act at a meeting, or by writing without a
meeting, by the vote or written assent of a majority of its members. The
Committee shall select a Secretary and the Secretary shall be this Plan's agent
for service of legal process, keep records of all meetings of the Committee, and
forward all necessary communications to the Trustee. Subject to the approval of
the board of directors of the Company, the Committee shall have the power to
adopt and enforce such rules, regulations and procedures as it deems desirable
for the conduct of its
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affairs and the efficient administration of this Plan and that are consistent
with the provisions of this Plan and ERISA.
(i) The members of the Committee, and each of them, shall discharge
their duties with respect to this Plan (i) solely in the interest of the
Participants and Beneficiaries, (ii) for the exclusive purpose of providing
benefits to Employees participating in this Plan and their beneficiaries and of
defraying reasonable expenses of administering this Plan, and (iii) with the
care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims. The Employers hereby jointly and severally indemnify the members of the
Committee, and each of them, from the effects and consequences of their acts,
omissions and conduct in their official capacity, except to the extent that such
effects and consequences shall result from their own willful misconduct.
(j) No member of the Committee shall receive any compensation or fee
for services, unless otherwise agreed between such member of the Committee and
the Employers, but the Employers shall reimburse the Committee members for any
necessary expenditures incurred in the discharge of their duties as Committee
members.
(k) The Committee may employ such counsel (who may be of counsel for
any Employer) and agents and may arrange for such clerical and other services as
it may require in carrying out the provisions of this Plan.
Section 10.2. Claims Procedure. Any Participant or distributee who
believes he or she is entitled to benefits in an amount greater than those which
he or she is receiving or has received may file a claim with the Committee. Such
a claim shall be in writing and state the nature of the claim, the facts
supporting the claim, the amount claimed, and the address of the
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claimant. The Committee shall review the claim and, unless special circumstances
require an extension of time, within 90 days after receipt of the claim, give
notice to the claimant, either in writing by registered or certified mail or in
an electronic notification, of the Secretary's decision with respect to the
claim. Any electronic notice delivered to the claimant shall comply with the
standards imposed by applicable Regulations. If the Committee determines that
special circumstances require an extension of time for processing the claim, the
claimant shall be so advised in writing within the initial 90-day period and in
no event shall such an extension exceed 90 days. The extension notice shall
indicate the special circumstances requiring an extension of time and the date
by which the Committee expects to render the benefit determination. The notice
of the decision of the Committee with respect to the claim shall be written in a
manner calculated to be understood by the claimant and, if the claim is wholly
or partially denied, the Committee shall notify the claimant of the adverse
benefit determination and shall set forth the specific reasons for the adverse
determination, the references to the specific Plan provisions on which the
determination is based, a description of any additional material or information
necessary for the claimant to perfect the claim, an explanation of why such
material or information is necessary, and a description of the claim review
procedure under the Plan and the time limits applicable to such procedures,
including a statement of the claimant's right to bring a civil action under
Section 502 of ERISA following an adverse benefit determination on review. The
Committee shall also advise the claimant that the claimant or the claimant's
duly authorized representative may request a review by the Chairman of the
Committee of the adverse benefit determination by filing with the Chairman of
the Committee, within 60 days after receipt of a notification of an adverse
benefit determination, a written request for such review. The claimant shall be
informed that, within the same 60-day period, he or she (a) may be provided,
upon
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request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to the claimant's claim for benefits and
(b) may submit to the Chairman written comments, documents, records and other
information relating to the claim for benefits. If a request is so filed, review
of the adverse benefit determination shall be made by the Chairman within,
unless special circumstances require an extension of time, 60 days after receipt
of such request, and the claimant shall be given written notice of the
Chairman's final decision. If the Chairman determines that special circumstances
require an extension of time for processing the claim, the claimant shall be so
advised in writing within the initial 60-day period and in no event shall such
an extension exceed 60 days. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which the Chairman
expects to render the determination on review. The review of the Chairman shall
take into account all comments, documents, records and other information
submitted by the claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.
The notice of the final decision shall include specific reasons for the
determination and references to the specific Plan provisions on which the
determination is based and shall be written in a manner calculated to be
understood by the claimant.
Section 10.3. Procedures for Domestic Relations Orders. If the
Committee shall receive any judgment, decree or order (including approval of a
property settlement agreement) pursuant to State domestic relations or community
property law relating to the provision of child support, alimony or marital
property rights of a spouse, former spouse, child or other dependent of a
Participant and purporting to provide for the payment of all or a portion of the
Participant's Service Annuity to or on behalf of one or more of such persons
(such judgment, decree or order being hereinafter called a "domestic relations
order"), the Secretary of the Committee shall
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promptly notify the Participant and each other payee specified in such domestic
relations order of its receipt and of the following procedures. After receipt of
a domestic relations order, the Secretary of the Committee shall determine
whether such order constitutes a "qualified domestic relations order" as defined
in paragraph (b) of Section 13.2, and shall notify the Participant and each
payee named in such order in writing of the Secretary's determination within a
reasonable time after receipt of such order. Such notice shall be written in a
manner calculated to be understood by the parties and shall contain an
explanation of the review procedure under this Plan. If the Secretary of the
Committee determines that the order is not a "qualified domestic relations
order," such notice also shall set forth specific reasons for the Secretary's
determination. The Secretary shall advise each party that each party or a duly
authorized representative of such party may request a review by the full
Committee of the Secretary's determination by filing with the Committee within
60 days of receipt of the Secretary's determination a written request for such
review. The Secretary of the Committee shall give every party affected by any
such request for review notice of such request. Each party also shall be
informed that he or she may have reasonable access to pertinent documents and
submit comments in writing to the Committee in connection with such request for
review. Within 60 days after a request for review, each party shall be given
written notice of the Committee's final determination, which notice shall be
written in a manner calculated to be understood by the parties and shall include
specific reasons for such final determination.
Section 10.4. Computation of Benefits. The benefit formula, factors
contained in any Tables or Schedules and the Federal Benefit taken into account
in determining the amount of a Participant's Service Annuity (including the
amount paid under the applicable form of payment of such Service Annuity) or the
amount of any surviving spouse or surviving child annuity
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payable with respect to any Participant shall be the formula, factors and/or
Federal Benefit, as applicable, in effect on the date of the Participant's
Termination of Employment.
Section 10.5. Actuary to Be Employed. the Company or the Committee
shall engage an actuary to do such technical and advisory work as the Company or
the Committee may request, including analyses of the experience of this Plan
from time to time, the preparation of actuarial tables for the making of
computations thereunder, and the submission to the Company or the Committee of
an annual actuarial report, which report shall show the financial condition of
this Plan, a statement of the contributions to be made by the Employers for the
ensuing year, and such other information as may be requested by the Company or
the Committee.
Section 10.6. Funding Policy. The board of directors of the Company
shall establish a funding policy and method consistent with the objectives of
this Plan and the requirements of Title I of ERISA and shall communicate such
policy and method, and any changes in such policy and method, to the Trustee.
Section 10.7. Notices to Participants, Etc. All notices, reports
and statements given, made, delivered or transmitted to a Participant or any
other person entitled to or claiming benefits under this Plan shall be deemed to
have been duly given, made or transmitted when mailed by first class mail with
postage prepaid and addressed to the Participant or such other person at the
address last appearing on the records of the Committee.
Section 10.8. Notices to Employers or Committee. Written
directions, notices and other communications from Participants or any other
person entitled to or claiming benefits under this Plan to the Employers or
Committee shall be deemed to have been duly given, made or transmitted either
when delivered to such location as shall be specified upon the forms
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prescribed by the Committee for the giving of such directions, notices and other
communications or when mailed by first class mail with postage prepaid and
addressed to the addressee at the address specified upon such forms.
Section 10.9. Records. The Committee shall keep a record of all of
its proceedings and shall keep or cause to be kept all books of account, records
and other data as may be necessary or advisable in its judgment for the
administration of this Plan.
Section 10.10. Responsibility to Advise Committee of Current
Address. Each person entitled to receive a payment under this Plan shall file
with the Committee in writing such person's complete mailing address and each
change therein. A check or communication mailed to any person at such person's
address on file with the Committee shall be deemed to have been received by such
person for all purposes of this Plan. Although neither the Committee nor the
Trustee shall be obliged to search for or ascertain the location of any person,
the Committee shall make reasonable efforts to locate any missing Participant or
Beneficiary entitled to benefits hereunder. If the Committee is in doubt as to
whether payments are being received by the person entitled thereto, it shall, by
registered mail addressed to the person concerned at his or her last address
known to the Committee, notify such person that all future payments will be
withheld until such person submits to the Committee evidence of his or her
continued life and proper mailing address.
ARTICLE 11
PARTICIPATION BY OTHER EMPLOYERS
Section 11.1. Adoption of Plan. With the consent of the Company, any
entity may become a participating Employer under this Plan with respect to all
or a designated group of its employees by taking such action as shall be
necessary or desirable to adopt this Plan and
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executing and delivering such instruments as may be necessary or desirable to
put this Plan into effect with respect to such entity.
Section 11.2. Withdrawal from Participation. Any Employer may, with
the consent of the Company, withdraw from participation in this Plan at any time
by filing with the Committee a duly certified copy of a resolution of its board
of directors to that effect and giving notice of its intended withdrawal to the
Committee and the Trustee prior to the effective date of withdrawal.
Section 11.3. Company and Committee Agent for Employers. Each
corporation which shall become a participating Employer pursuant to Section 11.1
(relating to adoption of the Plan) or Article 12 (relating to continuance by a
successor) by so doing shall be deemed to have appointed the Company and the
Committee its agent to exercise on its behalf all of the powers and authorities
hereby conferred upon the Company and the Committee by the terms of this Plan,
including, but not by way of limitation, the power to amend and terminate this
Plan. The authority of the Company and the Committee to act as such agent shall
continue unless and until the portion of the Service Annuity Fund held for the
benefit of Employees of the particular Employer and their Beneficiaries is set
aside in a separate trust as provided in Section 15.2 (relating to establishment
of separate plan).
ARTICLE 12
CONTINUANCE BY A SUCCESSOR
In the event that any Employer shall be reorganized by way of
merger, consolidation, transfer of assets or otherwise, so that a corporation,
partnership or person other than an Employer shall succeed to all or
substantially all of such Employer's business, such successor may be substituted
for such Employer under this Plan by adopting this Plan and, if
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necessary, becoming a party to the Service Annuity Fund. Contributions by such
Employer shall be automatically suspended from the effective date of any such
reorganization until the date upon which the substitution of such successor
corporation for the Employer under this Plan becomes effective. If, within 90
days following the effective date of any such reorganization, such successor
shall not have elected to become a party to this Plan, or if such successor
shall adopt a plan of complete liquidation other than in connection with a
reorganization, this Plan shall be automatically terminated with respect to
employees of such Employer as of the close of business on the 90th day following
the effective date of such reorganization or as of the close of business on the
date of adoption of such plan of complete liquidation, as the case may be, and
the Committee shall direct the Trustee to distribute the portion of the Service
Annuity Fund applicable to such Employer in the manner provided in Section 15.2
(relating to establishment of separate plan).
ARTICLE 13
MISCELLANEOUS
Section 13.1. Expenses. The expenses of the Trustee in the
administration of the Service Annuity Fund, including compensation, if any, to
the Trustee for its services, shall be paid by the Company or the Employers. All
costs and expenses incurred in the operation of the Service Annuity Fund, to the
extent not described in the preceding sentence, and all costs and expenses
incurred in the operation of the Plan and the Pooled Fund, including, but not
limited to, the expenses of the Committee, the fees of counsel and any agents
for the Trustee or the Committee, and the fees of investment managers that
manage assets of the Pooled Fund shall be paid by the Trustee from the Service
Annuity Fund or the Pooled Fund in such proportion as the Trustee, in its sole
discretion, shall determine, to the extent such expenses are not paid by the
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Employers and to the extent permitted under ERISA, Regulations and other
applicable laws. Any such expenses that are borne by the Employers shall be paid
out of their own funds in such proportions as the Committee shall determine. In
the event that the Company or any other Employer advances money on behalf of the
Service Annuity Fund for the payment of any expenses incurred in the operation
of the Plan, the Trustee shall reimburse the Company or such other Employer from
the Service Annuity Fund for any amount so advanced, without interest or fees.
Section 13.2. Non-Assignability. (a) It is a condition of this
Plan, and all rights of each Participant, Beneficiary and Retiree shall be
subject thereto, that no right or interest of any Participant, Beneficiary or
Retiree in this Plan shall be assignable or transferable in whole or in part,
either directly or by operation of law or otherwise, including, but not by way
of limitation, execution, levy, garnishment, attachment, pledge or bankruptcy,
but excluding devolution by death or mental incompetency, and no right or
interest of any Participant, Beneficiary or Retiree in this Plan shall be liable
for, or subject to, any obligation or liability of such Participant, Beneficiary
or Retiree, including claims for alimony or the support of any spouse or child,
except as provided in paragraph (b) of this Section 13.2 (relating to exception
for qualified domestic relations orders).
(b) Exception for Qualified Domestic Relations Orders.
Notwithstanding any provision of this Plan to the contrary, if a Participant's
Service Annuity under this Plan, or any portion thereof, shall be the subject of
one or more qualified domestic relations orders, as defined below, such Service
Annuity or portion thereof shall be paid to the person at the time and in the
manner specified in any such order. For purposes of this paragraph (b),
"qualified domestic relations order" shall mean any "domestic relations order"
as defined in Section 10.3 (relating to
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procedures for domestic relations orders) which creates (or recognizes the
existence of) or assigns to a person other than the Participant (an "alternate
payee") rights to all or a portion of the Participant's Service Annuity under
this Plan, and:
(A) clearly specifies
(i) the name and last known mailing address (if any) of the
Participant and each alternate payee covered by such order,
(ii) the amount or percentage of the Participant's Service
Annuity to be paid by this Plan to each such alternate payee, or the
manner in which such amount or percentage is to be determined,
(iii) the number of payments to, or period of time for which,
such order applies, and
(iv) each plan to which such order applies;
(B) does not require
(i) this Plan to provide any type or form of benefit or any
option not otherwise provided under this Plan at the time such order
is issued,
(ii) this Plan to provide increased benefits (determined on
the basis of actuarial equivalence), or
(iii) the payment of benefits to an alternate payee which at
the time such order is issued already are required to be paid to a
different alternate payee under a prior qualified domestic relations
order; and
(C) does not require the payment of benefits to any alternate payee
before the first to occur of (i) the earliest date as of which payment of
the Participant's Service Annuity could commence after his or her
Termination of Employment, and (ii) the Participant's attainment of age
50,
all as determined by the Company pursuant to the procedures contained in Section
10.3 (relating to procedures for domestic relations orders). Any amounts subject
to a domestic relations order prior to determination of its status as a
qualified domestic relations order which but for such order would be paid to the
Participant shall be segregated in a separate account or an escrow account
pending such determination. If, within a reasonable time after receipt of
written evidence of such order by the Company, it is determined that a domestic
relations order
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constitutes a qualified domestic relations order, the amount so segregated (plus
any interest thereon) shall be paid to the alternate payee in accordance with
the terms of the order. If, within a reasonable time after receipt of a domestic
relations order by the Company, it is determined that a domestic relations order
does not constitute a qualified domestic relations order, then the amount so
segregated (plus any interest thereon) shall, as soon as practicable, be paid to
the Participant. Any subsequent determination that such order constitutes a
qualified domestic relations order shall apply only to payments made on or after
the date of such subsequent determination.
Section 13.3. Employment Non-Contractual. Neither this Plan nor any
action taken by the Committee confers any right upon any Employee to continue in
employment with any Employer.
Section 13.4. Limitation of Rights. No Participant, Beneficiary or
Retiree shall have any right, title, interest or claim in or to any part of the
Service Annuity Fund at any time, but shall have the right only to distributions
from the Service Annuity Fund on the terms and conditions herein provided.
Neither this Plan nor any action taken by the Committee shall obligate any
Employer to make contributions to the Service Annuity Fund in excess of the
contributions authorized by the board of directors of the Company or create any
liability on an Employer for the payment of Service Annuities under this Plan.
Section 13.5. Merger or Consolidation with or Transfer to Another
Plan. A merger or consolidation with, or transfer of assets or liabilities to,
any other Plan shall not be effected unless the terms of such merger,
consolidation or transfer are such that each Participant, Beneficiary, Retiree
or other person entitled to receive benefits from this Plan would, if this Plan
were to terminate immediately after the merger, consolidation or transfer,
receive a benefit equal
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to or greater than the benefit such person would be entitled to receive if this
Plan were to terminate immediately before the merger, consolidation, or
transfer.
If an Employee or a group of Employees ceases to be an Employee or
Employees of an Employer and becomes an employee or employees of an Affiliate
that is not an Employer but that maintains its own pension plan, there shall be
transferred from the Service Annuity Fund to the trust fund for the pension plan
of such Affiliate assets in an amount equal to the proportion of the amount of
the total assets of the Service Annuity Fund, after deducting therefrom the
amount actuarially determined to be necessary for the payment in full of Service
Annuities theretofore granted to all Retirees and Participants, which the
actuarial reserve allocable to such Employee or such group of Employees, as the
case may be, bears to the actuarial reserve allocable to all Employees. If,
however, any such group of Employees shall include all of the Employees of all
Employers, all of the assets of the Service Annuity Fund shall be so
transferred.
If and when a separate pension plan and trust fund is created by the
Company for supervisory, administrative and management Employees, there shall be
transferred from the Service Annuity Fund to such separate trust fund assets in
an amount equal to the sum of (a) that proportion of the amount of the total
assets of the Service Annuity Fund, after deducting therefrom the amount
actuarially determined to be necessary for the payment in full of Service
Annuities theretofore granted to all Retirees and Participants, which the
actuarial reserve allocable to such supervisory, administrative and management
Employees bears to the actuarial reserve allocable to all Employees, and (b) the
amount of assets actuarially determined to be necessary for the payment in full
of Service Annuities theretofore granted to Retirees who were supervisory,
administrative or management Employees at the time of the granting of such
Service Annuities. If and when an Employee shall thereafter be transferred to or
from the
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management payroll, there shall be transferred from the Service Annuity Fund to
such separate trust fund or from such separate trust fund to the Service Annuity
Fund, as the case may be, assets in an amount determined in the same manner as
described in the preceding sentence (and the Employee's Service Annuity or
benefits in the nature of a service annuity shall subsequently be paid out of
the Service Annuity Fund or such separate trust fund, as the case may be).
If and when an employee or a group of employees of an Affiliate that
is not an Employer shall cease to be an employee or employees of such Affiliate
and shall become an Employee or Employees of an Employer, the Trustee under the
Service Annuity Fund shall accept, upon transfer from the trust fund of the
pension plan of such Affiliate, assets in an amount equivalent to that
proportion of the amount of the total assets of such trust fund, after deducting
therefrom the amount actuarially determined to be necessary for the payment in
full of benefits theretofore granted, which the actuarial reserve allocable to
such Employee or such groups of Employees, as the case may be, bears to the
actuarial reserve allocable to all employees. If, however, any such group of
Employees shall include all of the employees of such Affiliate, all of the
assets of such trust fund shall be so accepted.
In the case of each transfer of assets made or accepted pursuant to
the provisions of this Section 13.5, the amount of the total assets and (if less
than all assets are to be transferred) the proportion thereof to be transferred
shall be determined as of a date not earlier than December 31 of the preceding
calendar year.
All assets accepted, upon transfer, by the Trustee under the Service
Annuity Fund, pursuant to the provisions of this Section 13.5, shall be held and
applied in accordance with the provisions of the Trust Agreement relating to the
Service Annuity Fund.
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Section 13.6. Medical Examination. A Participant or Beneficiary for
whom a determination or verification of physical or medical condition is in the
opinion of the Committee relevant to the application of this Plan shall, if and
when reasonably requested by the Committee, submit to medical examination by a
physician appointed by the Committee.
ARTICLE 14
TOP-HEAVY PLAN REQUIREMENTS
Section 14.1. Top-Heavy Plan Determination. If, as of the
determination date (as hereinafter defined) for any Plan Year, the aggregate
present value of (a) the accrued Service Annuities under this Plan and the
accrued benefits under all other defined benefit plans in the aggregation group
(as defined below) and (b) the aggregate account balances under all defined
contribution plans in such aggregation group, in each case with respect to all
participants in such plans who are key employees (as defined in Section 416(i)
of the Code) for such Plan Year, exceeds 60% of the aggregate of the present
value of the Service Annuities, accrued benefits and account balances of all
participants in such plans as of the determination date, then this Plan shall be
a top-heavy plan for such Plan Year, and the requirements of Section 14.2
(relating to minimum benefit for top-heavy years), Section 14.3 (relating to
top-heavy vesting requirements) and Section 14.4 (relating to special rules for
applying statutory limitations on benefits) shall be applicable for such Plan
Year as of the first day thereof. An employee's compensation, as defined in
Section 416(i) of the Code, from the Company and its Affiliates for a Plan Year
shall be used, where applicable, in determining whether such employee is a key
employee.
For purposes of the first sentence of the preceding paragraph, for
any Plan Year, the Service Annuity accrued in respect of any Employee shall be
the amount calculated as of the determination date, and the present value of
such amount shall be based on the actuarial
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assumptions used in the actuarial valuation as of such determination date. The
calculation of the present value of the Service Annuity accrued in respect of
any Employee shall be subject to adjustments required under Section 416 of the
Code.
If this Plan shall be a top-heavy plan for any Plan Year and not be
a top-heavy plan for any subsequent Plan Year, the requirements of this Article
shall not be applicable for such subsequent Plan Year except to the extent
provided in Section 14.3 (relating to top-heavy vesting requirements).
For purposes of this Article, (a) the aggregation group shall
consist of (i) if a key employee was a Participant in this Plan during the Plan
Year containing the determination date (defined below) or any of the four
preceding Plan Years, then this Plan and each other plan of an Employer which is
qualified under Section 401(a) of the Code and in which a key employee is a
participant during any of such Plan Years, (ii) this Plan and each other plan
which enables this Plan to meet the requirements of Section 401(a)(4) or 410(b)
of the Code during the Plan Year containing the determination date (defined
below) or any of the four preceding Plan Years, and (iii) this Plan and each
other plan of an Employer which it shall so designate and which together with
this Plan shall satisfy the requirements of Sections 401(a)(4) and 410 of the
Code; (b) the determination date for all plans in the aggregation group shall be
the last day of the preceding plan year; and (c) the valuation date applicable
to a determination date shall be (i) in the case of a defined benefit plan, the
date as of which the most recent actuarial valuation for the plan year including
the determination date is prepared, and (ii) in the case of a defined
contribution plan, the date as of which account balances are determined which is
coincident with or immediately precedes the determination date, except that if
any such plan specifies a different determination or valuation date, such
different date shall be used with respect to such plan. For the purpose of
-75-
determining the Service Annuity, accrued benefit or account balance of a
participant, any person who received a distribution from a plan in the
aggregation group during the five-year period ending on the last day of the
preceding plan year shall be treated as a participant in such plan, and any such
distribution shall be included in such participant's Service Annuity, accrued
benefit or account balance as the case may be.
Section 14.2. Minimum Benefit for Top-Heavy Years. (a) Subject to
paragraph (b) of this Section 14.2 and the applicable reductions set forth in
Article 5 (relating to Service Annuities) and Article 6 (relating to Service
Annuity forms), the annual amount of Service Annuity on a single life basis to
which an eligible employee (other than an eligible employee who is a key
employee as defined in Section 416(i) of the Code) is entitled at age 65 under
Section 5.2 (relating to normal and deferred retirement), Section 5.3 (relating
to early retirement), Section 5.4 (relating to disability retirement at or after
age 45), Section 5.5 (relating to disability retirement before age 45) or
Section 5.7 (relating to deferred vested termination) shall in no event be less
than (i) the product of (A) 2% of such eligible employee's average compensation,
as described in Section 416(c) of the Code, from the Company and its Affiliates
during such eligible employee's five highest-paid consecutive calendar years of
service beginning after January 1, 1983 and while the Plan is top-heavy,
multiplied by (B) the number of such eligible employee's years of Credited
Service (but not in excess of ten) ending after December 31, 1983 while the Plan
is top-heavy less (ii) the annual actuarial equivalent of the eligible
employee's vested portion of such eligible employee's account balances
attributable to employer contributions and forfeitures, and earnings and losses
thereon (including prior distributions thereof) and accrued benefits to which
such eligible employee is entitled on
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Termination of Employment under all other qualified plans maintained by the
Company or its Affiliates.
For purposes of this Article 14 (relating to top-heavy plan
requirements), "eligible employee" shall mean any employee other than an
employee who is included in a unit of employees covered by a collective
bargaining agreement between employee representatives and an Employer, if there
is evidence that retirement benefits have been the subject of good faith
bargaining between such employee representatives and such Employer.
(b) The provisions of paragraph (a) shall not apply with respect to
an eligible employee if, for each year in which this Plan is top-heavy, (i) the
eligible employee's Employer also maintains a defined contribution plan which is
included in the aggregation group for such year, and (ii) contributions made on
behalf of each eligible employee other than key employees and forfeitures
allocated to such eligible employee during such Plan Year are at least 5% of
such eligible employee's compensation.
Section 14.3. Top-Heavy Vesting Requirements. Not-withstanding any
provision of this Plan to the contrary, if an eligible employee's Termination of
Employment occurs during a Plan Year in which this Plan is top-heavy and after
the eligible employee has completed at least two years of Vesting Service but
before the eligible employee has completed five years of Vesting Service, or
after this Plan has been top-heavy and during the time this Plan was top-heavy
such eligible employee has completed three years of Vesting Service, then such
eligible employee shall be entitled, subject to Article 6 (relating to Service
Annuity forms) and Article 7 (relating to limitation on benefits), to receive,
determined in accordance with the following table, the vested percentage of the
eligible employee's Service Annuity computed pursuant to Section 5.7 (relating
to deferred vested termination):
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Years of Vesting Service Vested Percentage
------------------------ -----------------
2 but less than 3 ......................... 20%
3 but less than 4 ......................... 40%
4 but less than 5 ......................... 60%
5 or more ................................. 100%
Section 14.4. Special Rules for Applying Statutory Limitations on
Benefits. In any Plan Year for which this Plan is top-heavy, clauses (C)(I) and
(D)(I) of the first paragraph of Section 7.1 (relating to maximum annual
benefits) shall be applied by substituting "100%" for "125%" appearing therein
unless, for such Plan Year (i) the percentage of Service Annuities accrued by
Participants who are key employees does not exceed 90% of the Service Annuities
accrued by all Participants, and (ii) the minimum accrued benefit of each
Participant under all defined benefit plans in the aggregation group is at least
3% of such Participant's average compensation multiplied by each year of such
Participant's Credited Service after 1983, not in excess of 10, while such plans
are top-heavy.
ARTICLE 15
AMENDMENT AND TERMINATION
Section 15.1. Amendment. The board of directors of the Company may
at any time and from time to time amend or modify this Plan in any manner deemed
by the board of directors of the Company to be necessary or desirable, provided,
however, that in the case of any amendment or modification that would not result
in an aggregate cost to the Company of more than $250,000, the Plan may be
amended or modified by action of the Senior Vice President of Human Resources of
the Company or another executive officer holding title of equivalent or greater
responsibility and, provided, further, that no amendment shall be made that
affects Employees who are represented by Local 15 I.B.E.W. that is not
consistent with that portion of the Company's collective bargaining agreements
with Local 15 I.B.E.W. concerning the Plan.
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Any such amendment or modification shall become effective on such date as the
board of directors of the Company shall determine and may apply to Participants
in this Plan at the time thereof as well as to future Participants, provided,
however, that no such amendment or modification which reduces the basis for the
computation of Service Annuities shall be retroactive as to service prior to the
date of such amendment or modification.
In addition, the Committee may amend or modify subdivision (3) of
Section 2.1 (relating to the definition of Basic Compensation) and subdivision
(22) of Section 2.1 (relating to the definition of Incentive Pay) by changing
such subdivisions as described therein.
Section 15.2. Establishment of Separate Plan. If an Employer shall
withdraw from this Plan under Section 11.2 (relating to withdrawal from
participation), the Committee shall determine the portion of the Service Annuity
Fund held by the Trustee which is applicable to the Participants and Retirees of
such Employer and direct the Trustee to segregate such portion in a separate
trust. Such separate trust shall thereafter be held and administered as a part
of the separate plan of such Employer.
Section 15.3. Termination of the Plan by an Employer. the Company
may at any time, by resolution adopted by its board of directors, terminate this
Plan in its entirety. In addition, any Employer may at any time terminate its
participation in this Plan by resolution adopted by its board of directors to
that effect. If the Internal Revenue Service shall refuse to issue an initial
favorable determination letter that this Plan and the Service Annuity Fund as
adopted by the Company meets the requirements of Section 401(a) of the Code and
that the Service Annuity Fund is exempt from tax under Section 501(a) of the
Code, any Employer may terminate its participation in this Plan and direct the
Trustee to pay and deliver to that Employer the portion of the Service Annuity
Fund applicable to its contributions.
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Section 15.4. Distribution upon Termination or Partial Termination.
Upon termination or partial termination of this Plan, the Service Annuities
accrued as of the date of termination or partial termination, as the case may
be, of all affected Participants shall be fully vested. After providing for any
expenses of the termination of this Plan, or, in the event of the partial
termination of this Plan, any expenses of such partial termination which are to
be borne by the portion of the Service Annuity Fund applicable to those
Employees affected by the partial termination, the remainder of such portion of
the Service Annuity Fund (the "asset value") shall be allocated pursuant to the
priority categories set forth in Section 4044 of ERISA and PBGC Regulations. In
the event that after the termination of this Plan there is any asset value
remaining after such allocation, the assets representing such asset value shall
be paid over and applied for the benefit of the Employees of the Employers. The
portion of the asset value allocated to provide Service Annuities to any person
or group of persons may be applied for the benefit of such person or persons by
the distribution of cash, continuance of the Service Annuity Fund, establishment
of a new trust fund, purchase of annuities from an insurance company, or
otherwise, as determined by the Company in its sole discretion. Notwithstanding
the preceding sentences, if the Plan is terminated, the Service Annuity of each
highly compensated employee as defined in Section 414(q) of the Code (and any
former highly compensated employee) is limited to a Service Annuity that is
nondiscriminatory under Section 401(a)(4) of the Code.
Section 15.5. Trust to Be Applied Exclusively for Participants and
Their Beneficiaries. Subject only to the provisions of Section 4.2 (relating to
return of contributions), Section 15.3 (relating to termination of the Plan by
an Employer), Section 15.4 (relating to distribution upon termination or partial
termination of the Plan) and any other provision of this Plan to the contrary
notwithstanding, it shall be impossible for any part of the Service Annuity
-80-
Fund to be used for or diverted to any purpose not for the exclusive benefit of
Participants and their Beneficiaries either by operation or termination of this
Plan, power of amendment or other means.
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IN WITNESS WHEREOF, Commonwealth Edison Company has caused this
instrument to be executed by its Chairman and its corporate seal to be hereunto
affixed, and attested by its Secretary on this _____ day of ________________
1997.
COMMONWEALTH EDISON COMPANY
By _____________________________________
Chairman
82
Exhibit 1
Items Included as Basic Compensation
Effective on and after April 1, 1995, the payments to Participants
which shall be included in "Basic Compensation" for purposes of subdivision (3)
of Section 2.1 of the Plan shall be as follows:
1. Regular earnings,
2. Nuclear license bonuses, and
3. Meter reader bonuses.
4. Payroll deductions for any commuter benefit offered to
management employees pursuant to Section 132(f)(4) of the
Code.
In addition, to the extent they relate to but are not a part of
regular earnings for a given period which otherwise have been used in
calculating Basic Compensation, the following items shall be included in the
determination of "Basic Compensation" for purposes of subdivision (3) of Section
2.1 of the Plan:
1. Payments for disability absences,
2. Back pay included that is not subject to FICA,
3. Paid and unpaid absences,
4. Permissible rest period payments,
5. Credit for service by union officials on union business,
6. Payments allowed for military duty and
7. Credits allowed upon return from a military leave of absence.
Exhibit 2
Plans Included for Incentive Pay
Payments under the following plans shall be considered in
determining a Participant's Incentive Pay, as defined in subdivision (22) of
Section 2.1 of the Plan:
1. the Commonwealth Edison Company 1994 Variable Compensation
Award for Management Employees Under the 1993 Long-Term
Incentive Plan,
2. the Unicom Corporation 1995 Variable Compensation Award for
Management Employees Under the Unicom Corporation Long-Term
Incentive Plan,
3. any annual incentive award provided under the Unicom
Corporation Long Term Incentive Plan or any other successor or
other plan that provides annual incentive awards to
Participants; provided, however that awards payable under any
such plans with respect to any period beginning on or after
January 1, 2001 to a Participant who is a member of IBEW Local
Union 15 shall not be Incentive Pay for Plan purposes,
4. the Commonwealth Edison Pension Fund Management Incentive Pay
Plan (effective January 1, 1993),
5. the Pension Fund Management Deferred Incentive Pay Plan
(effective January 1, 1994),
6. the Commonwealth Edison Company Bulk Power Marketing Incentive
Plan (effective April 1, 1994),
7. any variable pay plan negotiated by the Company with respect
to its union Employees, and
8. Quarterly Incentive Awards paid to a management Employee
pursuant to the Exelon Corporation Quarterly Incentive Award.
SUPPLEMENT 1
EARLY RETIREMENT WINDOW FOR CERTAIN EMPLOYEES
This Supplement 1 sets forth the early retirement benefits available
to each "Eligible Participant" (as defined below) who is at least age 50 and has
completed at least 5 years of Credited Service (after taking into account the
grant of any "Service Equivalent" under Section II below) and who submits a
signed election and waiver and release of claims to the Company no earlier than
the date of the Eligible Participant's "Termination Date" (as defined below),
or, if later, 45 days after the Participant receives a summary of the benefits
provided hereunder, on forms prescribed by the Company, electing one of the
Options set forth below and waiving all employment-related claims against the
Employers.
I. Definitions. As used in this Supplement 1, the following words and phrases
shall have the following respective meanings when capitalized unless the
context clearly indicates otherwise:
A. Cause. Willful commission of acts or omissions which have, have had,
or are likely to have, a material adverse effect on the business,
operations, financial condition or reputation of an Employer; or
conviction (including a plea of guilty or nolo contendere) of a
felony or any crime of fraud, theft, dishonesty or moral turpitude.
B. Eligible Participant. A Participant (i) whose employment with the
Employers is terminated other than for Cause as a result of either
(A) his or her Employer's restructuring related to the merger or
pending merger of Unicom Corporation and PECO Energy or (B) the
Participant's rejection of an offer of a Significant Transfer, (ii)
who is notified that his or her Termination Date shall occur on or
before December 31, 2002 and is eligible for the normal retirement
benefits or early retirement benefits set forth in this Supplement
1, (iii) who continues employment with the Employers until the
Termination Date set forth in the Participant's notification of
eligibility (or until such earlier date permitted by the Employers)
and who does not accept before such Termination Date (or, if later,
the date the Eligible Employee's waiver of claims becomes effective)
another position with any Employer, Exelon Corporation or any of
their respective affiliates and (iv) who maintains an acceptable
level of performance during the period ending on his or her
Termination Date.
C. Service Equivalent. An amount equal to 12 months plus, if
applicable, one additional week for each year of an Eligible
Participant's Credited Service in excess of 10; provided, however,
that only that portion of the Service Equivalent necessary to
satisfy the eligibility requirements for an early retirement Service
Annuity (granted under Section 5.3 or under the pension enhancement
described in Section III B.2.b.) shall be taken into account for
purposes of determining the amount of an Eligible Participant's
early retirement Service Annuity.
D. Significant Transfer. An offer of a position with Exelon Corporation
or a transfer (between or within business units) that, in either
case, results in one or more of the following;
1. an increase in the Participant's one-way commuting distance of
more than 50 miles;
2. a substantial change in the Participant's major position
responsibilities and duties (as determined by the head of the
Participant's business unit);
3. a salary band for the Participant that is lower than the
salary band for the Participant's previous position; or
4. a reduction in the Participant's annual base salary or hourly
compensation rate, as applicable.
E. Termination Date. The date on which an Eligible Participant's
Termination of Employment occurs.
F. Week of Base Salary. In the case of an Eligible Participant who is a
full-time Employee, a "Week of Base Salary" shall be determined by
dividing (i) the Participant's annual base salary in effect on the
his or her Termination Date, excluding any additives, premiums or
other adjustments, by (ii) 52. In the case of an Eligible
Participant who is a part-time Employee, a "Week of Base Salary"
shall equal the product of (i) his or hourly compensation rate in
effect on his or her Termination Date multiplied by (ii) the number
of hours each week that such Participant is regularly scheduled to
work with an Employer.
II. Grant of Service Equivalent. An Eligible Participant shall be granted a
Service Equivalent only if, after addition of the Service Equivalent, the
Participant would become eligible for an early retirement Service Annuity
under Section 5.3 or would be deemed to be age 50 with at least 5 years of
Credited Service. The Service Equivalent shall not be granted to a
Participant if such Participant, as of his or her Termination Date, is
eligible, without the addition of the Service Equivalent, for an early
retirement Service Annuity under Section 5.3 or, as of his or her
Termination Date, he or she has attained age 50 and has at least 5 years
of Credited Service, unless in the latter case, the grant of the Service
Equivalent would qualify the Eligible Participant for an early retirement
Service Annuity under Section 5.3 pursuant to Section IIIb hereof.
III. Benefits.
A. Eligible Participants who are Age 50 with at Least 10 Years of
Credited Service. Notwithstanding anything contained in the Plan to
the contrary, if an Eligible Participant, after taking into account
the Service Equivalent granted to such Eligible Participant under
Section II hereof, is at least age 50 on his or her Termination Date
and has at least 10 years of Credit Service as of such date or would
be deemed to be age 50 with at least 10 years of Credited Service as
of such date, such Eligible Participant shall be entitled to an
early retirement Service Annuity under Section 5.3. Payment of the
Eligible Participant's early retirement Service
Annuity under Section 5.3 shall commence at the time elected by the
Eligible Participant, provided that the Eligible Participant has had
a Termination of Employment and has attained at least age 50
(determined, for this purpose, by disregarding any Service
Equivalent granted to the Eligible Participant). Payment shall be
made in any form provided under the Plan.
B. Eligible Participants who are Age 50 with at Least 5, but Less than
10, Years of Credited Service. Notwithstanding anything contained in
the Plan to the contrary, if an Eligible Participant, after taking
into account the Service Equivalent granted to such Eligible
Participant under Section II hereof, is at least age 50 on his or
her Termination Date and has completed at least 5 but less than 10
years of Credited Service as of such date or would be deemed to be
age 50 with at least 5 but less than 10 years of Credited Service as
of such date, such Eligible Participant shall be entitled to elect
one of the following normal or early retirement benefit under the
Plan:
1. Option 1 - Unreduced Additional Benefit. An additional benefit
equal to 52 weeks of Base Salary. An Eligible Participant may
elect to receive the additional benefit in the form of a lump
sum distribution (which shall be paid in the same manner and
subject to the terms provided under Section 6.7) or in any
other form provide under the Plan. An Eligible Participant who
elects this Option 1 shall not be eligible for an early
retirement Service Annuity under Section 5.3.
2. Option 2 - Reduced Additional Benefit and Pension Enhancement.
An Eligible Participant who elects Option 2 shall be entitled
to the following two benefits:
a. Reduced Additional Benefit. An additional benefit equal
to 26 Weeks of Base Salary. An Eligible Participant may
elect to receive the additional benefit in the form of a
lump sum distribution (which shall be paid in the same
manner and subject to the terms provided under Section
6.7) or in any other form provided under the Plan.
b. Pension Enhancement. In lieu of a deferred Service
Annuity under Section 5.7, a normal retirement Service
Annuity under Section 5.2 or an early retirement Service
Annuity under Section 5.3, using the Eligible
Participant's age and years of Credited Service
(including any Service Equivalent granted to the
Eligible Participant under Section II hereof) as of his
or her Termination Date (or, if later, the date that the
Eligible Participant begins receiving his or her normal
retirement Service Annuity under Section 5.2 or early
retirement Service Annuity under Section 5.3). Payment
of the Eligible Participant's normal retirement or early
retirement Service Annuity shall commence at the time
elected by the Eligible Participant,
provided that the Eligible Participant has had a
Termination of Employment and has attained at least age
50 or age 65, as applicable (determined, for this
purpose, by disregarding an Service Equivalent granted
to the Eligible Participant). Payment shall be made in
any form provided under the Plan.
C. Eligible Participants who are not Age 50 or who do not have at Least
5 Years of Credited Service. An Eligible Participant who, (after the
addition of any Service Equivalent) as of his or her Termination
Date, is not age 50 or does not have at least 5 years of Credited
Service shall not be entitled to any benefits under this Supplement
1.
D. Adjustments to Comply with Nondiscrimination Rules. If payment of
the benefits described in this Supplement 1 to any Eligible
Participant who is a "highly compensated employee," as defined in
section 414(q) of the Code would cause the Plan to fail any
nondiscrimination requirements of section 401(a) of the Code, the
benefits otherwise payable under this Supplement 1 shall be
restricted in any manner determined by the Committee so as to permit
the Plan to satisfy such nondiscrimination requirements.
EXHIBIT A
TABLE B
EARLY RETIREMENT SERVICE FACTORS
APPLICABLE MONTHLY PAYMENTS TO AGE 65
THE FOLLOWING FACTORS SHALL BE APPLIED (A) TO DETERMINE THE REDUCTIONS
APPLICABLE TO THE EARLY RETIREMENT SERVICE ANNUITY OF ANY PARTICIPANT WHO IS NOT
A MEMBER OF IBEW LOCAL UNION 15, AND WHOSE TERMINATION OF EMPLOYMENT OCCURS ON
OR AFTER APRIL 1, 1995, AND (B) TO DETERMINE THE REDUCTIONS APPLICABLE TO THE
EARLY RETIREMENT SERVICE ANNUITY OF ANY PARTICIPANT WHO IS A MEMBER OF IBEW
LOCAL UNION 15 AND WHOSE TERMINATION OF EMPLOYMENT OCCURRED AFTER APRIL 1, 1995
AND BEFORE OCTOBER 1, 1999:
AGE 0 1 2 3 4 5 6 7 8 9 10 11
- --------------------------------------------------------------------------------------------------------------------------
50 .7200 .7225 .7250 .7275 .7300 .7325 .7350 .7375 .7400 .7425 .7450 .7475
51 .7500 .7525 .7550 .7575 .7600 .7625 .7650 .7675 .7700 .7725 .7750 .7775
52 .7800 .7825 .7850 .7875 .7900 .7925 .7950 .7975 .8000 .8025 .8050 .8075
53 .8100 .8125 .8150 .8175 .8200 .8225 .8250 .8275 .8300 .8325 .8350 .8375
54 .8400 .8425 .8450 .8475 .8500 .8525 .8550 .8575 .8600 .8625 .8650 .8675
55 .8700 .8725 .8750 .8775 .8800 .8825 .8850 .8875 .8900 .8925 .8950 .8975
56 .9000 .9025 .9050 .9075 .9100 .9125 .9150 .9175 .9200 .9225 .9250 .9275
57 .9300 .9325 .9350 .9375 .9400 .9425 .9450 .9475 .9500 .9525 .9550 .9575
58 .9600 .9617 .9633 .9650 .9667 .9683 .9700 .9717 .9733 .9750 .9767 .9783
59 .9800 .9817 .9833 .9850 .9867 .9883 .9900 .9917 .9933 .9950 .9967 .9983
60 1.0000
EXHIBIT B
TABLE B1
EARLY RETIREMENT SERVICE FACTORS
APPLICABLE MONTHLY PAYMENTS TO AGE 65
THE FOLLOWING FACTORS SHALL BE APPLIED TO DETERMINE THE REDUCTIONS APPLICABLE TO
THE EARLY RETIREMENT SERVICE ANNUITY OF ANY PARTICIPANT WHO IS A MEMBER OF IBEW
LOCAL UNION 15 WHOSE TERMINATION OF EMPLOYMENT OCCURS ON OR AFTER OCTOBER 1,
1999:
AGE 0 1 2 3 4 5 6 7 8 9 10 11
- --------------------------------------------------------------------------------------------------------------------------
50 .7900 .7925 .7950 .7975 .8000 .8025 .8050 .8075 .8100 .8125 .8150 .8175
51 .8200 .8225 .8250 .8275 .8300 .8325 .8350 .8375 .8400 .8425 .8450 .8475
52 .8500 .8525 .8550 .8575 .8600 .8625 .8650 .8675 .8700 .8725 .8750 .8775
53 .8800 .8825 .8850 .8875 .8900 .8925 .8950 .8975 .9000 .9025 .9050 .9075
54 .9100 .9125 .9150 .9175 .9200 .9225 .9250 .9275 .9300 .9325 .9350 .9375
55 .9400 .9425 .9450 .9475 .9500 .9525 .9550 .9575 .9600 .9625 .9650 .9675
56 .9700 .9725 .9750 .9775 .9800 .9825 .9850 .9875 .9900 .9925 .9950 .9975
57 1.0000
EXHIBIT C
TABLE B2
EARLY RETIREMENT SUPPLEMENTAL FACTORS
APPLICABLE MONTHLY PAYMENTS TO AGE 65
THE FOLLOWING FACTORS SHALL BE APPLIED (A) TO DETERMINE SUPPLEMENTAL MONTHLY
PAYMENTS TO AGE 65 FOR ANY PARTICIPANT WHO IS NOT A MEMBER OF IBEW LOCAL UNION
15 AND WHOSE TERMINATION OF EMPLOYMENT OCCURS ON OR AFTER APRIL 1, 1995, AND (B)
TO DETERMINE THE SUPPLEMENTAL MONTHLY PAYMENTS TO AGE 65 FOR ANY PARTICIPANT WHO
IS A MEMBER OF IBEW LOCAL UNION 15 WHOSE TERMINATION OF EMPLOYMENT OCCURRED
AFTER APRIL 1, 1995 AND BEFORE OCTOBER 1, 1999:
AGE 0 1 2 3 4 5 6 7 8 9 10 11
- --------------------------------------------------------------------------------------------------------------------------
50 .4200 .4175 .4150 .4125 .4100 .4075 .4050 .4025 .4000 .3975 .3950 .3925
51 .3900 .3875 .3850 .3825 .3800 .3775 .3750 .3725 .3700 .3675 .3650 .3625
52 .3600 .3575 .3550 .3525 .3500 .3475 .3450 .3425 .3400 .3375 .3350 .3325
53 .3300 .3275 .3260 .3225 .3200 .3175 .3150 .3125 .3100 .3075 .3050 .3025
54 .3000 .2975 .2950 .2925 .2900 .2875 .2850 .2825 .2800 .2775 .2760 .2725
55 .2700 .2675 .2650 .2625 .2600 .2575 .2550 .2525 .2500 .2475 .2450 .2425
56 .2400 .2375 .2350 .2325 .2300 .2275 .2250 .2225 .2200 .2175 .2150 .2125
57 .2100 .2075 .2050 .2025 .2000 .1975 .1950 .1925 .1900 .1875 .1850 .1825
58 .1800 .1775 .1750 .1725 .1700 .1675 .1650 .1625 .1600 .1575 .1550 .1525
59 .1500 .1479 .1458 .1438 .1417 .1396 .1375 .1354 .1333 .1313 .1292 .1271
60 .1250 .1229 .1208 .1188 .1167 .1146 .1125 .1104 .1083 .1063 .1042 .1021
61 .1000 .0979 .0958 .0938 .0917 .0896 .0875 .0854 .0833 .0813 .0792 .0771
62 .0750 .0729 .0708 .0688 .0667 .0646 .0625 .0604 .0583 .0563 .0542 .0521
63 .0500 .0479 .0458 .0438 .0417 .0396 .0375 .0354 .0333 .0313 .0292 .0271
64 .0250 .0229 .0208 .0188 .0167 .0146 .0125 .0104 .0083 .0063 .0042 .0021
EXHIBIT D
TABLE B3
EARLY RETIREMENT SUPPLEMENTAL FACTORS
APPLICABLE MONTHLY PAYMENTS TO AGE 65
THE FOLLOWING FACTORS SHALL BE APPLIED TO DETERMINE THE SUPPLEMENTAL MONTHLY
PAYMENTS TO AGE 65 FOR ANY PARTICIPANT WHO IS A MEMBER OF IBEW LOCAL UNION 15
WHOSE TERMINATION OF EMPLOYMENT OCCURS ON OR AFTER OCTOBER 1, 1999:
AGE 0 1 2 3 4 5 6 7 8 9 10 11
- --------------------------------------------------------------------------------------------------------------------------
50 .4100 .4075 .4050 .4025 .4000 .3975 .3950 .3925 .3900 .3875 .3850 .3825
51 .3800 .3775 .3750 .3725 .3700 .3675 .3650 .3625 .3600 .3575 .3550 .3525
52 .3500 .3475 .3450 .3425 .3400 .3375 .3350 .3325 .3300 .3275 .3250 .3225
53 .3200 .3175 .3150 .3125 .3100 .3075 .3050 .3025 .3000 .2975 .2950 .2925
54 .2900 .2875 .2850 .2825 .2800 .2775 .2750 .2725 .2700 .2675 .2650 .2625
55 .2600 .2575 .2550 .2525 .2500 .2475 .2450 .2425 .2400 .2375 .2350 .2325
56 .2300 .2275 .2250 .2225 .2200 .2175 .2150 .2125 .2100 .2075 .2050 .2025
57 .2000 .1979 .1958 .1938 .1917 .1896 .1875 .1854 .1833 .1803 .1782 .1761
58 .1750 .1729 .1708 .1688 .1667 .1646 .1625 .1604 .1583 .1563 .1542 .1521
59 .1500 .1479 .1458 .1438 .1417 .1396 .1375 .1354 .1333 .1313 .1292 .1271
60 .1250 .1229 .1208 .1188 .1167 .1146 .1125 .1104 .1083 .1063 .1042 .1021
61 .1000 .0979 .0958 .0938 .0917 .0896 .0875 .0854 .0833 .0813 .0792 .0771
62 .0750 .0729 .0708 .0688 .0667 .0646 .0625 .0604 .0583 .0563 .0542 .0521
63 .0500 .0479 .0458 .0438 .0417 .0396 .0375 .0354 .0333 .0313 .0292 .0271
64 .0250 .0229 .0208 .0188 .0167 .0146 .0125 .0104 .0083 .0063 .0042 .0021
EXHIBIT 10-4 APPENDIX B
SERVICE ANNUITY PLAN
OF
PECO ENERGY COMPANY
As Amended and Restated Effective December 31, 2001
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................... 1
ARTICLE II PARTICIPATION....................................................... 9
ARTICLE III ACCRUAL OF BENEFITS................................................. 12
3.1 Accrued Benefit.......................................................... 12
3.2 Minimum Accrued Benefit.................................................. 14
3.3 Application of Section 401(a)(17) Compensation Limit..................... 15
3.4 Transferred Employees.................................................... 15
3.5 Overall Permitted Disparity Limits....................................... 15
ARTICLE IV. BENEFITS............................................................ 16
4.1 Normal Retirement........................................................ 16
4.2 Postponed Retirement..................................................... 16
4.3 Early Retirement......................................................... 17
4.4 Deferred Annuity......................................................... 18
4.5 Disabled Eligible Employees.............................................. 19
4.6 Maximum Annuity.......................................................... 19
4.7 Early Retirement Supplement.............................................. 23
4.8 Benefit Commencement Date................................................ 23
4.9 Post-Retirement Adjustment............................................... 23
4.10 Special Early Retirement Benefit......................................... 25
4.11 Minimum Annuity.......................................................... 25
4.12 Suspension of Benefits................................................... 25
ARTICLE IVA. SPECIAL LIMITED DURATION EARLY RETIREMENT BENEFIT................... 26
4A.1 Eligibility.............................................................. 26
4A.2 Special Early Retirement Election........................................ 27
4A.3 Benefits................................................................. 27
4A.4 Special Rules............................................................ 29
ARTICLE IVB. NUCLEAR VOLUNTARY RETIREMENT INCENTIVE PLAN......................... 30
4B.1 Eligibility.............................................................. 30
4B.2 Voluntary Early Retirement Election...................................... 30
4B.3 Benefits................................................................. 31
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
4B.4 Special Rules............................................................ 32
ARTICLE IVC. VOLUNTARY RETIREMENT INCENTIVE PROGRAM.............................. 32
4C.2 Voluntary Early Retirement Election...................................... 33
4C.3 Benefits................................................................. 35
4C.4 Special Rules............................................................ 36
ARTICLE IVD. 1998 WORKFORCE REDUCTION PROGRAM.................................... 36
4D.1 Purpose.................................................................. 36
4D.2 Definitions.............................................................. 36
4D.3 Elections of the Retirement and Separation Benefits...................... 40
4D.4 Computation of Retirement Benefits Under the Program..................... 40
4D.5 Computation, Payment and Form of Separation Benefits Under the Program... 41
ARTICLE IVE. MERGER SEPARATION PROGRAM........................................... 42
4E.1 Purpose.................................................................. 42
4E.2 Definitions.............................................................. 42
4E.3 Elections of the Retirement and Separation Benefits...................... 46
4E.4 Computation of Retirement Benefits Under the Program..................... 46
4E.5 Computation of Separation Benefits Under the Program..................... 47
4E.6 Payment and Form of Annuities Under the Program.......................... 48
ARTICLE V. FORM OF PENSIONS.................................................... 49
5.1 Unmarried Participants................................................... 49
5.2 Married Participants..................................................... 49
5.3 Contingent Annuity Option................................................ 49
5.4 Death Benefits for Other Vested Participants............................. 52
5.5 Notice to Participants................................................... 54
5.6 Cash-Outs................................................................ 55
5.7 Spousal Consent.......................................................... 55
5.8 Minimum Distribution Requirements........................................ 55
5.9 Application for Benefits................................................. 56
5.10 Direct Rollovers......................................................... 56
-ii-
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE VI. BREAKS IN SERVICE................................................... 56
ARTICLE VII. CONTRIBUTIONS....................................................... 58
7.1 Contributions by the Company............................................. 58
7.2 Source of Benefits....................................................... 58
ARTICLE VIII. ADMINISTRATION...................................................... 59
ARTICLE IX. AMENDMENT AND TERMINATION........................................... 60
9.1 Amendment................................................................ 60
9.2 Termination.............................................................. 61
9.3 Limitation on Benefits................................................... 61
ARTICLE X. MISCELLANEOUS....................................................... 62
10.1 Forfeitures.............................................................. 62
10.2 Mergers, Etc............................................................. 62
10.3 Nonalienation of Benefits................................................ 62
10.4 Effect on Employment..................................................... 62
10.5 Facility of Payment...................................................... 62
10.6 Lost Payees.............................................................. 63
10.7 Applicable Law........................................................... 63
10.8 Effective Date........................................................... 63
ARTICLE XI. TOP-HEAVY PROVISIONS................................................ 63
11.1 Definitions.............................................................. 63
11.2 Top-Heavy Operating Rules................................................ 64
ARTICLE XII. POST RETIREMENT HEALTH BENEFITS..................................... 65
12.1 Eligibility.............................................................. 65
12.2 Benefits Provided........................................................ 66
12.3 Establishment of Accounts................................................ 66
12.4 Funding.................................................................. 67
-iii-
SERVICE ANNUITY PLAN
OF
PECO ENERGY COMPANY
As Amended and Restated Effective December 31, 2001
Article I Definitions.
Whenever used in this Plan:
1.1 "Accrued Benefit" means the amount of pension payable in the
form of a Single Life Annuity commencing on a Participant's Normal Retirement
Date (or, immediately, if the Participant has passed his Normal Retirement Date)
accrued by a Participant under Article III as of the date of reference. Accrued
Benefits shall only be payable in accordance with Articles IV and V.
1.2 "Active Participant" means a Participant who is an Eligible
Employee.
1.3 "Actuarial Equivalent" means a benefit of equal actuarial value
under the assumptions set forth in Appendix A.
1.4 "Affiliate" means, as of any time of reference: (a) any
corporation included with the Company in a controlled group of corporations
within the meaning of Section 414(b) of the Code, (b) any trade or business
(whether or not incorporated) which is under common control with the Company
within the meaning of Section 414(c) of the Code, (c) any member of any
affiliated service group of which the Company is a member within the meaning of
Section 414(m) of the Code, and (d) any other entity required to be aggregated
with the Company pursuant to regulations under Section 414(o) of the Code;
provided, however, that for purposes of Section 4.6, when applying Sections
414(b) and (c) of the Code, the phrase "more than 50%" shall be substituted for
the phrase "at least 80%" each place it appears in Section 1563(a)(1) of the
Code.
1.5 "Age" means age on last birthday, except that an individual
attains age 70-1/2 on the corresponding date in the sixth calendar month
following the month in which his seventieth birthday occurs (or the last day of
such sixth month if there is no such corresponding date therein).
1.6 "Benefit Accrual Computation Period" means the portion of a
calendar year that begins on the latest of (a) January 1, (b) the date on which
an Employee becomes an Eligible Employee or (c) the date an Active Participant
resumes work after receiving benefits under the Company's Disabilitant Plan (or
June 1, 1992, for an Active Participant who is receiving benefits under the
Company's Disabilitant Plan on June 1, 1992) and ends on the earliest of (1)
December 31, (2) the date an Employee ceases to be an Eligible Employee, (3) the
date an Active Participant commences receiving benefits under the Company's
Disabilitant Plan (except with respect to Participants described in the proviso
to the last sentence of Section
1.8(b)), (4) an Employee's Normal Retirement Date (in the case of an Employee
who does not complete an Hour of Service on or after January 1, 1988), or (5)
the date of an Employee's death.
1.7 "Benefit Commencement Date" means, for any Participant, the date
as of which his first periodic benefit payment or single sum payment is due.
"Benefit Commencement Date" also means, with respect to a surviving spouse or
other beneficiary, the date on which the survivor's benefit under Section 5.3 or
5.4 commences to the surviving spouse or other beneficiary.
1.8 "Benefit Year" means a credit awarded as follows, subject to
Article VI:
(a) Each Employee as of December 31, 1975 shall be credited
with a number of Benefit Years equal to his years of service under the
Plan as of that date;
(b) Each Active Participant shall be credited with one Benefit
Year for each 12 month Benefit Accrual Computation Period after December
31, 1975 during which he completes 1,000 or more Hours of Service and
1/12th of a Benefit Year for each month or part of a month of a Benefit
Accrual Computation Period of less than 12 months during which his Hours
of Service equal or exceed 83 1/3 times the number of full months in the
period. Benefit Years are not credited with respect to any period during
which an Active Participant is receiving benefits under the Company's
Disabilitant Plan; provided, however, that Benefit Years shall be credited
to an Active Participant who is receiving benefits under the Company's
Disabilitant Plan on June 1, 1992, with respect to any period after May
31, 1992 for which such benefits are received.
(c) A Power Team Employee shall not receive credit for any
Benefit Year that accrues while he or she is a Power Team Employee.
Notwithstanding the foregoing, for the purposes of Section 5.3 only, a
Power Team Employee shall be deemed to receive credit for Benefit Years to
the extent such Power Team Employee otherwise would have earned such
credit but for the provisions of this Section 1.8(c).
(d) An EIS Senior Management Employee shall not receive credit
for any Benefit Year, or portion of a Benefit Year, that accrues after
October 31, 1999, or the date on which such Participant becomes an EIS
Senior Management Employee, if later, and the Benefit Accrual Computation
Period for such Participant that would otherwise include such date shall
end on such date. Notwithstanding the foregoing, for the purposes of
Section 5.3 only, an EIS Senior Management Employee shall be deemed to
receive credit for Benefit Years to the extent such EIS Senior Management
Employee otherwise would have earned such credit but for the provisions of
this Section 1.8(d).
(e) Notwithstanding the foregoing, for purposes of calculating
a Participant's Benefit Years, each period of Qualified Military Service
served by a Participant is, upon reemployment by the Company or an
Affiliate within the time during which the Participant's right to
reemployment is protected by applicable law, deemed to constitute service
with the Company for such purposes.
1.9 "Code" means the Internal Revenue Code of 1986, as amended, or
any superseding provision of law.
2
1.10 "Company" means, (i) prior to the Merger Date, PECO Energy
Company, a Pennsylvania corporation (known prior to January 1, 1994 as the
"Philadelphia Electric Company"), and any Affiliate of PECO Energy Company which
adopts this Plan, and (ii) on and after the Merger Date, Exelon Corporation,
PECO Energy Company, and any Affiliate of Exelon Corporation which adopts this
Plan.
1.11 "Compensation" means:
(a) for service prior to January 1, 1939 - normal full-time
wages or salary at the established payroll rates;
(b) for service subsequent to December 31, 1938 wages, salary,
and any other remuneration actually paid or credited to the Employee in
recompense for his services as an Employee, including such amounts
contributed at the direction of the Employee to the PECO Energy Company
Employee Savings Plan or Employees' Section 125 Plan or, effective January
1, 2002, amounts contributed on a pre-tax basis to a qualified
transportation fringe benefit plan under Code section 132(f)(4);
(c) effective for plan years beginning on or after December
12, 1994, for purposes of subsection (b) above, a Participant's
Compensation shall include the Compensation that the Participant would
have received during a period of Qualified Military Service (or, if the
amount of such Compensation is not reasonably certain, the Participant's
average earnings from the Company or an Affiliate for the twelve-month
period immediately preceding the Participant's period of Qualified
Military Service); provided, however, that the Participant returns to work
within the period during which his right to reemployment is protected by
law.
The remuneration of an Employee who is absent for the purposes described in one
of Sections 1.17(a) through 1.17(e) shall be deemed to continue at his base rate
in effect immediately prior to the start of his absence; provided, however, that
no Compensation shall be imputed under this sentence for any period prior to
June 1, 1992 during which the Employee is receiving benefits under the Company's
Disabilitant Plan. Effective January 1, 1990, Compensation shall not include any
lump sum payment of an Employee's vacation pay or sick pay, nor any severance
payment made by the Company or an Affiliate or pursuant to any plan maintained
by the Company or an Affiliate. Compensation shall include annual incentive
award payments under the Exelon Corporation Annual Incentive Award Program and
quarterly incentive payments under the Exelon Corporation Quarterly Incentive
Award Program payable with respect to years beginning on or after January 1,
2002.
Notwithstanding the foregoing, (i) Compensation for a Power Team Employee shall
not include any Compensation earned while such Employee is a Power Team
Employee; (ii) for an individual who retires after December 31, 1993 and prior
to January 1, 1996, "Compensation" shall include all accrued vacation, accrued
sick pay and severance payments for purposes of Section 3.1(a)(2) and
4C.3(a)(1)(A)(II); and (iii) Compensation for an EIS Senior Management Employee
shall not include any Compensation earned after October 31, 1999 or the date on
which such Participant becomes an EIS Senior Management Employee, if later.
3
1.12 "Covered Compensation" means, as of any date of reference, the
average of the taxable wage base in effect under the Social Security Act, as
amended, in each of the thirty-five (35) consecutive years ending with the year
prior to such Plan Year; provided however, that (i) for any Participant who has
attained Age 65, "Covered Compensation" will at all times thereafter be "Covered
Compensation" for the Plan Year in which the Participant attained Age 65, (ii)
for any Participant who retires after December 31, 1993 and on or before January
1, 1995, Covered Compensation will be determined as of the year-end 1993, and
(iii) for any Participant who retires after December 31, 1994 and on or before
January 1, 1996, Covered Compensation will be determined as of year-end 1994.
1.12A "EIS" means Exelon Infrastructure Services, Inc.
1.12B "EIS Senior Management Employee" means an Employee of PECO
Energy Company who is assigned to perform services for EIS on a full-time basis
in a position that is eligible to participate in the EIS Long Term Incentive
Plan.
1.13 "Eligibility Computation Period" means, with respect to any
Employee, the twelve-month period beginning on his Employment Date and all
calendar years beginning after his Employment Date.
1.14 "Eligibility Year" means a credit awarded as follows, subject
to Article VI:
(a) Each Employee as of December 31, 1975, shall be credited
with a number of Eligibility Years equal to the greater of:
(1) one Eligibility Year for each full year of the
Employee's service as of that date under the Plan as then in effect; or
(2) one Eligibility Year for each Eligibility
Computation Period beginning before January 1, 1976, in which the Employee
completed at least 1,000 Hours of Service, disregarding any Eligibility
Computation Period that would have been disregarded under Article VI if it
had applied at the time in question.
(b) Each Employee shall be credited with one Eligibility Year
for each Eligibility Computation Period beginning after December 31, 1975,
in which he completes 1,000 or more Hours of Service.
1.15 "Eligible Employee" means an Employee employed by the Company
or on leave during a period of Qualified Military Service and, for the time
period beginning on the Merger Date, who (a) was an Eligible Employee prior to
the Merger Date or (b) first becomes an Employee on or after the Merger Date and
is employed initially at a facility owned immediately before the Merger Date by
PECO Energy Company or an Affiliate that was an Affiliate of PECO Energy Company
immediately before the Merger Date.
Notwithstanding the foregoing, an Eligible Employee shall not include (i) an
Employee who is employed by a joint venture in which the Company is a joint
venturer, (ii) an Employee whose wages are subject to collective bargaining
except to the extent a collective bargaining agreement
4
relating to him so provides, (iii) a probationary Employee, (iv) an Employee who
is an Employee solely by reason of being a leased employee within the meaning of
Section 414(n) or 414(o) of the Code, or (v) an individual who is an independent
contractor or any other person who is not treated by the Company or an Affiliate
as an Employee for the purposes of withholding federal employment taxes,
regardless of any contrary governmental or judicial determination relating to
such employment status or tax withholding.
Notwithstanding the foregoing, an Eligible Employee shall not include any Power
Team Employee while he is a Power Team Employee, or any Employee of the Exelon
Generation Company, LLC Power Team division who is a participant in the
Commonwealth Edison Company Service Annuity System.
Notwithstanding the foregoing, effective October 31, 1999, an Eligible Employee
shall not include any EIS Senior Management Employee. EIS Senior Management
Employees hired on or after October 1, 1999 shall not be eligible to participate
in the Plan.
Notwithstanding anything herein to the contrary, subject to the provisions
relating to rehired employees in Section 2.10, no Employee who was not a
Participant before January 1, 2001 shall be eligible to participate in the Plan
after December 31, 2000.
1.16 "Employee" means a person who is employed by the Company or an
Affiliate or is absent under circumstances included in his Employment. An
individual shall be deemed to be actively employed by the Company or an
Affiliate if such individual is employed directly by the Company or an Affiliate
or is a leased employee within the meaning of Section 414(n) or 414(o) of the
Code with respect to whose services the Company or Affiliate is the recipient
and to whom Section 414(n)(5) of the Code does not apply. An individual who
receives a back pay award from the Company or an Affiliate shall be deemed to be
an Employee for the period for which back pay is awarded. An Employee shall
cease to be such on his retirement, resignation, discharge, or death.
Notwithstanding the foregoing, the term "Employee" shall not include independent
contractors or any other persons who are not treated by the Employer as
employees for purposes of withholding federal employment taxes, regardless of
any contrary governmental or judicial determination relating to such employment
status or tax withholding.
1.17 "Employment" means active employment by the Company or an
Affiliate. In addition, any of the following types of absence shall be counted
as Employment (on the same work schedule under which the Employee was employed
by the Company or Affiliate immediately prior to the absence) if it immediately
follows a period of active employment with the Company or an Affiliate:
(a) absence due to a period of Qualified Military Service, if
the Employee resumes work with the Company or an Affiliate, following
discharge, within the time specified by then applicable laws.
(b) absence resulting from disability on account of illness or
accident during which the Employee is eligible for and receives disability
benefits under a disability benefit plan sponsored by the Company or an
Affiliate.
5
(c) absence which the Company or an Affiliate certifies was
for good cause.
(d) leave of absence granted by the Company or an Affiliate.
(e) lay-off, if the Employee returns to work within such
period as may be specified in the rules of the Company or Affiliate in
effect at the time of reference.
(f) absence during which regular remuneration is paid.
1.18 "Employment Date" means the day on which an Employee completes
his first Hour of Service.
1.19 "Fund" means the assets accumulated for purposes of the Plan.
1.20 "Highly Compensated Employee" means, effective January 1, 1997,
an Employee who performs services for the Company or an Affiliate during the
current Plan Year who was:
(a) an Employee who was, at any time during the current Plan
Year or in the immediately preceding Plan Year, a 5% owner, as defined in
Section 416(i)(1) of the Code; or
(b) an Employee who, during the immediately preceding Plan
Year, received compensation (as defined in Section 415(c)(3) of the Code
plus, for the 1997 Plan Year, amounts excluded from income under Sections
125 and 402(e)(3) of the Code, and for Plan Years beginning after December
31, 2000, amounts excluded from income under Section 132(f)(4) of the
Code) from the Company or an Affiliate in excess of $80,000, as adjusted
by the Secretary of the Treasury in accordance with Section 415(d) of the
Code.
1.21 "Hour of Service" means, for each Employee, a credit used to
measure his service for various purposes under the Plan. Hours of Service are
credited as follows:
(a) Each hour which is not included in a period described in
Paragraph (b), below, but for which the Employee is directly or indirectly
paid or entitled to payment by the Company or an Affiliate, for the
performance of duties or otherwise, including back pay, without regard to
mitigation of damages, shall count as one Hour of Service. Notwithstanding
the preceding sentence, no Hours of Service shall be credited under this
Paragraph (a) to the extent such credit will cause the Employee to be
credited with more than 501 Hours of Service (including Hours of Service
credited under Paragraph (b)) with respect to any single continuous period
during which the Employee performs no duties; provided, however, that this
limit shall not apply in the case of an award of back pay to the extent
the award so specifies.
(b) Each week of absence for Qualified Military Service from
which the Employee returns to the Company or an Affiliate with legally
protected reemployment rights shall count as a number of Hours of Service
determined under subsection (e) if the
6
Employee was employed in a position designated as full-time immediately
before the period of Qualified Military Service or, if subsection (e) does
not apply, a number of Hours of Service equal to the number of hours of
work in the Employee's customary week of work at the time the absence
began.
(c) Hours of Service for the performance of duties shall
be credited to the Employee for the computation period or periods in which
the services are performed. Hours of Service for non-performance of duties
shall be credited to the Employee for the computation period or
computation periods in which the non-performance of duties occurs. Hours
of Service for back pay shall be credited to the Employee for the
computation period or computation periods to which the award or agreement
pertains rather than the computation period or periods in which it was
made.
(d) Solely for purposes of determining whether a
One-Year Break in Service (as defined in Article VI) has occurred in an
Eligibility Computation Period or a Vesting Computation Period, an
Employee who is absent from work for Maternity/Paternity Leave shall
receive credit for the Hours of Service which would otherwise have been
credited to such Employee but for such absence, or in any case in which
such Hours of Service cannot be determined, eight Hours of Service per day
of such absence. An Employee shall be credited with Hours of Service under
this Paragraph (d) in the computation period in which the absence begins
if necessary to prevent a Break in Service in that period, or, in all
other cases, in the following computation period.
(e) An Employee who is employed by the Company or an
Affiliate in a position designated by the Company or an Affiliate as
full-time shall be credited with forty-five (45) Hours of Service for each
week during which he is otherwise entitled to be credited with at least
one Hour of Service. Paragraphs (a)-(c) notwithstanding, Hours of Service
shall be credited at least as liberally as required by Department of Labor
Regulation Section 2530.200b-2(b) and (c).
(f) In the case of an Employee who is such solely by
reason of service as a leased employee (within the meaning of Section
414(n) or 414(o) of the Code), Hours of Service shall be credited as if
such Employee were employed and paid with respect to such service (or with
respect to any related absences or entitlement) by the Company or the
Affiliate that is the recipient thereof.
1.22 "Maternity/Paternity Leave" means, for any Employee, an
absence:
(a) by reason of the Employee's pregnancy;
(b) by reason of the birth of the child of the Employee;
(c) by reason of placement of the child with the Employee in
connection with the adoption of such child by the Employee; or
(d) for purposes of caring for such child for a period
immediately following such birth or placement.
7
1.22A "Merger Date" means the effective date of the merger of Unicom
Corporation with and into Exelon Corporation.
1.23 "Normal Retirement Date" means, for each Employee, the first
day of the calendar month coincident with or next following the date he attains
Age 65, except that the Normal Retirement Date of an Employee who becomes an
Active Participant in the Plan after attaining Age 60 shall be the first day of
the calendar month coincident with or next following the fifth anniversary of
the date on which the Employee became an Active Participant.
1.24 "Participant" means (a) an Employee who has become an Active
Participant under Article II, and (b) a former Active Participant whose Accrued
Benefit and Benefit Years have not been canceled under Section 6.2 or have been
restored under Section 6.5.
1.25 "Plan" means the Service Annuity Plan set forth herein,
provided that, on and after January 1, 1994, the Plan shall be known as the
"Service Annuity Plan of PECO Energy Company."
1.26 "Plan Year" means a calendar year after 1975. The Plan Year
shall be the limitation year for purposes of computing limitations on
contributions, benefits and allocations.
1.26A "Power Team Employee" means an Employee who is employed by the
Exelon Generation Company, LLC Power Team division or its successor, and (i) who
was not eligible to participate in the Plan before January 1, 2001, or (ii) who
was eligible to participate in the Plan before January 1, 2001 but is eligible
to participate in the performance share award program for Power Team employees
under the Exelon Corporation Long Term Incentive Plan or any predecessor or
successor incentive compensation program applicable to employees of the Power
Team division. An Employee who is described in clause (ii) of the preceding
sentence will be a Power Team Employee only during the period in which he
satisfies clause (ii).
1.27 "Qualified Joint and Survivor Annuity" means the form of
pension benefit described in this Section. Under a Qualified Joint and Survivor
Annuity payments begin on the date provided in Article IV and continue until the
first day of the month following the month in which the Participant's death
occurs. On the first day of the second month following the month of the
Participant's death, payments in an amount equal to 50% of the amount payable to
the Participant begin to his surviving spouse, but only if the spouse was
married to the Participant on the Participant's Benefit Commencement Date. Such
payments to the spouse shall end on the first day of the month following the
month in which the spouse's death occurs. The anticipated payments under a
Qualified Joint and Survivor Annuity shall be the Actuarial Equivalent of a
pension in the form of a Single Life Annuity in the amount set forth in Article
IV.
1.27A "Qualified Military Service" means any service in the
uniformed services (as defined in chapter 43 of title 38, United States Code)
where the Participant's right to reemployment is protected by law.
1.28 "Required Beginning Date" means April 1 of the calendar year
following the later of (a) the calendar year in which the Participant attains
Age 70-1/2; or (b) in the case of a Participant who is not a 5% owner (within
the meaning of Section 416(i) of the Code), the calendar year in which the
Participant's Separation from Service occurs. Notwithstanding the
8
foregoing, a Participant who is not a 5% owner (as defined above), reached age
70-1/2 in 1999 or 2000, and has not incurred a Separation from Service may elect
April 1, 2000 or April 1, 2001, respectively, as his Required Beginning Date.
1.29 "Separation from Service" means the termination of an
Employee's status as an Employee or any absence of an Employee in Employment
which is not described in Section 1.17.
1.30 "Single Life Annuity" means a form of pension benefit under
which payments begin on the date provided in Article IV and end on the first day
of the month following the month in which the Participant's death occurs.
1.31 "Social Security Retirement Age" means (a) for any individual
born before January 1, 1938, Age 65, (b) for any individual born after December
31, 1937, but before January 1, 1955, Age 66, or (c) for any individual born
after December 31, 1954, Age 67.
1.32 "Vesting Computation Period" means a calendar year.
1.33 "Vesting Year" means a credit awarded as follows, subject to
Article VI:
(a) Each Employee as of December 31, 1975, shall be credited
with a number of Vesting Years equal to his years of service (with
fractions rounded to the next full year) under the Plan as in effect on
that date.
(b) Each Employee shall be credited with one Vesting Year for
each Vesting Computation Period after 1975 in which he completes 1,000 or
more Hours of Service.
(c) If an Employee is credited with an Eligibility Year for an
Eligibility Computation Period that overlaps two Vesting Computation
Periods, but he is not credited with a Vesting Year for either of those
Vesting Computation Periods, the Employee shall be credited with one
Vesting Year. An Employee may have only one Vesting Year to his credit
under this Paragraph at any time.
(d) An Employee shall be deemed to have completed a Vesting
Year when he completes his one-thousandth Hour of Service in the relevant
Vesting Computation Period.
1.34 The masculine gender shall include the feminine.
ARTICLE II Participation.
2.1 Each Eligible Employee who is covered by the Plan as of December
31, 1975 shall be an Active Participant as of January 1, 1976.
2.2 Each other Eligible Employee shall become an Active Participant
on the later of January 1, 1976 or January 1 of the first Eligibility
Computation Period in which he completes 1,000 Hours of Service.
9
2.3 If a former Eligible Employee is not an Eligible Employee on the
date on which he would otherwise become an Active Participant under Section 2.2,
he shall not then become an Active Participant but shall become an Active
Participant on the first day thereafter on which he is an Eligible Employee,
provided that if he has a Separation from Service before becoming an Active
Participant, Section 6.4 shall apply.
2.4 Participation Freeze for Power Team Employees. Notwithstanding
the foregoing, all participation in the Plan by Power Team Employees shall be
frozen as of the date the Employee becomes a Power Team Employee.
2.5 Participation Freeze for EIS Senior Management Employees.
Notwithstanding the foregoing, all participation in the Plan by EIS Senior
Management Employees shall be frozen as of October 31, 1999, or the date such
Participant becomes an EIS Senior Management Employee, if later, and no Employee
who is an EIS Senior Management Employee shall be eligible to become a
Participant in the Plan after October 31, 1999.
2.6 Participation Freeze for all Employees after December 31, 2000.
Notwithstanding anything herein to the contrary, but subject to the provisions
of Section 2.10, no Employee who is not a Participant on December 31, 2000 shall
be eligible to participate in the Plan after December 31, 2000.
2.7 Transfer of Employment to or Reemployment in Positions Eligible
for Participation in the Plan or the Commonwealth Edison Company Service Annuity
System by Certain Individuals Who Were Participants in Such a Plan on December
31, 2000. If a Participant who was a Participant on December 31, 2000 transfers
employment to or is reemployed by the Company or an Affiliate in a job
classification with respect to which similarly situated employees of the Company
or Affiliate are not eligible to participate in the Plan but are instead
eligible to participate in the Commonwealth Edison Company Service Annuity
System (or would be so eligible but for their election to participate in the
Exelon Corporation Cash Balance Pension Plan), then such individual shall upon
such transfer or reemployment remain a Participant in the Plan and shall not
participate in the Commonwealth Edison Company Service Annuity System. If a
participant in the Commonwealth Edison Company Service Annuity System who was a
participant in such plan on December 31, 2000 transfers employment to or is
reemployed by the Company or an Affiliate in a management job classification
with respect to which similarly situated employees of the Company or Affiliate
are eligible to participate in the Plan (or would be so eligible but for their
election to participate in the Exelon Corporation Cash Balance Pension Plan),
then such individual shall upon such transfer or reemployment remain a
participant in the Commonwealth Edison Company Service Annuity System and shall
not participate in the Plan.
2.8 Pension Choice Election.
(a) In General. Each Participant who is, as of January 1,
2002, an Eligible Employee shall be permitted to elect, in the time and
manner prescribed by the Administrator, to either (i) continue
participating in the Plan on and after January 1, 2002 or (ii) cease
participating in the Plan as of December 31, 2001 and begin participating
in the Exelon Corporation Cash Balance Pension Plan as of January 1, 2002.
Each Eligible
10
Employee who elects to continue participating in the Plan or who is
offered and fails to make any such election shall continue to be a
Participant as of January 1, 2002. Each Eligible Employee who elects to
participate in the Exelon Corporation Cash Balance Pension Plan in lieu of
participation in this Plan shall cease participation in the Plan as of
December 31, 2001 and shall not be entitled to any benefit under the Plan,
unless such Participant receives a notification (the "Notice") from the
Company that his or her employment with the Company and the Affiliates
will be terminated on or before December 31, 2002 and that such
Participant is eligible for benefits under Article IVE of the Plan or any
severance plan maintained by the Company or an Affiliate. An Eligible
Employee who receives a Notice shall continue to be a Participant in the
Plan until his or her Separation from Service, notwithstanding such
Eligible Employee's election to participate in the Exelon Corporation Cash
Balance Pension Plan. An Eligible Employee (i) who receives a Notice, but
whose employment does not terminate on or before December 31, 2002, or
(ii) whose employment terminates before December 31, 2002 without the
Employee receiving a Notice, shall cease participation in the Plan as of
December 31, 2001 if such Employee elects, in the time and manner
prescribed by the Administrator, to participate in the Exelon Corporation
Cash Balance Pension Plan.
(b) Transfer of Benefits and Assets to Cash Balance Pension
Plan. If an Eligible Employee described in paragraph (a) above elects to
participate in the Exelon Corporation Cash Balance Pension Plan in lieu of
participating in the Plan, the Employee's pension, determined as of
December 31, 2001 based on the Employee's Benefit Years, Compensation and
average annual base salary as of such date, shall be transferred to the
Exelon Corporation Cash Balance Pension Plan, and such Employee shall not
accrue any additional benefit under the Plan. An amount of assets that is
equal to the present value of the Participant's pension described in the
preceding sentence, determined using the methods and assumptions
prescribed by Section 4044 of ERISA, shall also be transferred to the
Exelon Corporation Cash Balance Pension Plan. Such transfer of benefits
and assets related thereto shall occur as soon as administratively
practicable after the Eligible Employee makes the election described in
paragraph (a) above. In the event that an Eligible Employee whose pension
and related assets are transferred to the Exelon Corporation Cash Balance
Pension Plan receives a Notice and has a Separation from Service on or
before December 31, 2002, the pension and related assets that were
transferred to the Exelon Corporation Cash Balance Pension Plan shall be
transferred back to the Plan and the amount of the pension benefit accrued
by such Employee during 2002 (if any) shall be determined under the terms
of this Plan rather than the Exelon Corporation Cash Balance Pension Plan.
Such transfer shall occur as soon as administratively practicable.
2.9 Cessation of Participation. An individual's participation in the
Plan shall cease upon the first to occur of (i) the date the individual is no
longer eligible to receive a benefit from this Plan or (ii) the individual's
Separation from Service if the individual has not completed at least five
Vesting Years upon the date of his or her Separation from Service.
2.10 Rehire of Employees. The following rules shall apply to an
Eligible Employee who is rehired by the Company after a Separation from Service
and prior to
11
commencing his or her pension or any benefits under the Exelon Corporation Cash
Balance Pension Plan, as applicable:
(a) Rehire Date Before Absence of 5 Consecutive One-Year
Breaks in Service. If an Employee terminates employment and is later
rehired by the Company before having an absence from employment with the
Company and the Affiliates of five consecutive One-Year Breaks in Service,
then either: (1) if such Employee was a Participant on the date his or her
employment terminated, such Employee shall be a Participant in the Plan as
of his or her rehire date if he or she is then an Eligible Employee, or
(2) if such Employee was not a Participant on the date his or her
employment terminated, such Employee shall not be an Eligible Employee and
shall not become a Participant. Notwithstanding clause (1) of the
preceding sentence, if an Eligible Employee described in the preceding
sentence was not at any time permitted to make the election described in
Section 2.8(a) or was permitted to make such election and elected to
participate in the Exelon Corporation Cash Balance Pension Plan but such
election was not given effect as a result of such Employee's Separation
from Service, such Eligible Employee shall be permitted to elect, in the
time and manner prescribed by the Administrator, to either (1) participate
in the Plan as of his or her rehire date or (2) participate in the Exelon
Corporation Cash Balance Pension Plan at the time prescribed therein and
have his or her pension and related assets transferred to such plan in the
manner described in Section 2.8(b).
(b) Rehire Date After Absence of at Least 5 Consecutive
One-Year Breaks in Service. If an Employee terminates employment with the
Company and the Affiliates and the Employee was not a Participant or was a
Participant who did not have a vested pension as of the date his or her
employment terminated, and such Employee is rehired by the Company after
having an absence from employment with the Company and the Affiliates of
at least five consecutive One-Year Breaks in Service, such Employee shall
not be an Eligible Employee and shall not become a Participant upon such
rehire. If a Participant with a vested pension terminates employment with
the Company and the Affiliates and the Participant is rehired after having
an absence from employment with the Company and the Affiliates of at least
five consecutive One-Year Breaks in Service, such Participant shall remain
a Participant upon his or her rehire. Notwithstanding the preceding
sentence if a Participant described in the preceding sentence was not at
any time permitted to make the election described in Section 2.8(a), or
was permitted to make such election and elected to participate in the
Exelon Corporation Cash Balance Pension Plan but such election was not
given effect as a result of such Employee's Separation from Service, such
Eligible Employee shall be permitted to elect, in the time and manner
prescribed by the Administrator, to either (1) participate in the Plan as
of his or her rehire date or (2) participate in the Exelon Corporation
Cash Balance Pension Plan at the time prescribed therein and have his or
her pension and related assets transferred to such plan in the manner
described in Section 2.8(b).
ARTICLE III Accrual of Benefits.
3.1 Accrued Benefit. Except as otherwise provided in this Article or
in Article VI, each Participant shall have an Accrued Benefit equal to
one-twelfth of the greater of:
12
(a) The sum of (1) 2% of his average annual Compensation
during the period of his service, if any, between January 1, 1930 and
December 31, 1938, inclusive, multiplied by his Benefit Years before
January 1, 1939, and (2) 2% of his aggregate Compensation for employment
as an Eligible Employee after December 31, 1938, or
(b) The sum of (1) a percentage of his average annual base
salary plus payments under the Exelon Corporation Annual Incentive Award
Program for Management Employees, and the Exelon Corporation Quarterly
Incentive Award Program (but excluding payments under any other business
or group incentive or bonus programs) during his 60 consecutive months of
employment with the Company that yield the highest twelve month average
equal to 5% plus 1.2% for each of his first forty Benefit Years, and (2)
0.35% of such highest average in excess of Covered Compensation as of the
date of reference, multiplied by his Benefit Years (up to a maximum of
14%). (For the purposes of this Paragraph (b), (A) employment during the
most recent 5 years shall include absences which are included in
Employment, except an absence prior to June 1, 1992 during which an
Employee receives benefits under the Company's Disabilitant Plan, and the
average annual base salary of an Employee on an included absence shall be
calculated as if his base salary continued during any period of such
absence for which he did not receive compensation, such salary to be that
in effect when such period began, adjusted for increases applicable to his
job classification which occur prior to the end of such period, (B) with
respect to a Participant who is employed by the Company for less than
60-consecutive months, the Participant's average annual base salary shall
be determined by averaging the Participant's annual base salary for each
calendar year in which the Participant was at any time an Employee,
determined as if the Participant had remained an Employee for the entire
year, provided, that, if there are more than 5 such calendar years, the 5
years which result in the highest average will be used, (C) for purposes
of determining consecutive months of employment, months in which the
Participant performs no services, other than months for which salary is
imputed under (A) above, shall be disregarded, (D) annual base salary
shall be determined prior to reduction by amounts contributed at the
direction of the Employee to the PECO Energy Company Employee Savings Plan
or Employees' Section 125 Plan, or for Plan Years beginning after December
31, 2001, amounts contributed to a qualified transportation fringe benefit
plan under Section 132(f)(4) of the Code, (E) effective January 1, 1990, a
Participant's annual base salary shall not include any lump sum payment of
his accrued vacation pay or sick pay, nor any severance payment made by
the Company or an Affiliate or pursuant to any plan maintained by the
Company or any Affiliate.) and (F) effective January 1, 1996 for purposes
of calculating average annual base salary, any raise received during the
month shall be deemed to have been received on the first of such month.
A Participant's Accrued Benefit, however, shall not be less than the largest
early retirement benefit that he could at any time elect to receive under the
Plan. For purposes of the preceding sentence, the early retirement benefit that
a Participant may elect to receive at any time of reference is the monthly
annuity which, assuming he had a Separation from Service on the date of
reference, would be payable to him in the form of a Single Life Annuity
beginning as of the later of the day ten years prior to his Normal Retirement
Date or the first day of the month following the date of reference.
13
Notwithstanding the foregoing, the Accrued Benefit of a Power Team Employee
shall be frozen as of the date the Employee becomes a Power Team Employee and no
Power Team Employee shall earn any additional Accrued Benefit under the Plan
while the Employee is a Power Team Employee. The calculation of the benefit of a
Power Team Employee under subsection (a) and (b) shall be made without regard to
any Compensation, annual base salary or earnings attributable to any period
while the Employee is a Power Team Employee.
Notwithstanding the foregoing, an EIS Senior Management Employee's Accrued
Benefit shall be frozen as of October 31, 1999, or the date such Participant
becomes an EIS Senior Management Employee, if later, and no EIS Senior
Management Employee shall earn any additional Accrued Benefit under the Plan
after such date. The calculation of an EIS Senior Management Employee's benefit
under subsection (a) and (b) shall be made without regard to any Compensation,
annual base salary or earnings attributable to any period after October 31,
1999, or the date such Participant becomes an EIS Senior Management Employee, if
later.
3.2 Minimum Accrued Benefit. Except as provided in Section 6.5:
(a) as a result of the imposition of the $200,000 cap on
compensation under Section 401(a)(17) of the Code effective January 1,
1989 pursuant to Section 3.3, the Accrued Benefit of a Section 401(a)(17)
Employee determined as of any date on or after January 1, 1989 and prior
to January 1, 1994 shall not be less than the sum of:
(1) his Accrued Benefit determined as of December 31,
1988 under the provisions of the Plan as in effect through December 31,
1988; plus
(2) the Participant's Accrued Benefit determined under
Section 3.1 based on the Participant's Benefit Years earned on and after
January 1, 1989 and before January 1, 1994;
(b) as a result of the reduction of the $200,000 cap on
compensation under Section 401(a)(17) of the Code to $150,000 effective
January 1, 1994 pursuant to Section 3.3, the Accrued Benefit of a Section
401(a)(17) Employee determined as of any date on or after January 1, 1994
shall not be less than the sum of:
(1) his Accrued Benefit under Section 3.1 as of December
31, 1993 or, to the extent applicable, his Accrued Benefit under Section
3.2(a) as of December 31, 1993, if greater, determined in each case under
the provisions of the Plan as in effect through December 31, 1993;
provided, however, that, notwithstanding any provision of the Plan to the
contrary, base salary for any determination period (as defined in Section
3.3) that is taken into account in determining an Employee's average
annual base salary as of December 31, 1993 shall be subject to the Section
401(a)(17) Compensation Limit (as defined in Section 3.3) in effect for
1993; plus
(2) the Participant's Accrued Benefit determined under
section 3.1 based on the Participant's Benefit Years earned on and after
January 1, 1994.
For purposes of Section 3.2(a), a 'Section 401(a)(17) Employee' means an
Eligible Employee who completes an Hour of Service on or after January 1,
1989 and whose
14
Accrued Benefit as of a date on or after January 1, 1989 and prior to
January 1, 1994 is based on annual Compensation or base salary for a
determination period (as defined in Section 3.3) beginning prior to
January 1, 1989 that exceeds $200,000. For purposes of Section 3.2(b), a
'Section 401(a)(17) Employee' means an Eligible Employee who completes an
Hour of Service on or after January 1, 1994 and whose Accrued Benefit as
of a date on or after January 1, 1994 is based on annual Compensation or
base salary for a determination period (as defined in Section 3.3)
beginning prior to January 1, 1994 that exceeds $150,000.
3.3 Application of Section 401(a)(17) Compensation Limit. Annual
Compensation taken into account for purposes of Section 3.1(a) (and Articles
IVA, IVB and IVC) and annual base salary taken into account for purposes of
Section 3.1(b) (and Articles IVA, IVB and IVC) shall not exceed $200,000
($150,000, effective January 1, 1994), or such other amount as may be applicable
under Code Section 401(a)(17) (the 'Section 401(a)(17) Compensation Limit').
Except as provided below, the Section 401(a)(17) Compensation Limit in effect
for a calendar year applies to any period, not exceeding 12 months, over which
Compensation or base salary is determined ('determination period') and which
begins in such calendar year. Annual base salary for any determination period
beginning prior to 1989 that is taken into account in determining an Employee's
average annual base salary for purposes of determining the Employee's Accrued
Benefit as of a date on or after January 1, 1989 but prior to January 1, 1994
shall be subject to the Section 401(a)(17) Compensation Limit in effect for
1989. Annual base salary for any determination period beginning prior to 1994
that is taken into account in determining an Employee's average annual base
salary for purposes of determining the Employee's Accrued Benefit as of a date
on or after January 1, 1994 shall be subject to the Section 401(a)(17)
Compensation Limit in effect for 1994.
If a determination period consists of fewer than 12 months, the
Section 401(a)(17) Compensation Limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination period, and the
denominator of which is 12. For Plan Years beginning before January 1, 1997, the
family aggregation rules of Sections 401(a)(17)(A) of the Code, as in effect on
December 31, 1996, shall apply.
3.4 Transferred Employees. The Accrued Benefit of a Participant who
has ceased to be an Eligible Employee but who is still an Employee shall be
calculated on the basis of his Compensation, average annual base salary, Benefit
Years, and the formula in effect under this Article III as of the last date on
which he is an Eligible Employee.
3.5 Overall Permitted Disparity Limits. Notwithstanding any
provision in the Plan to the contrary, the overall permitted disparity limits
set forth in Treas. Reg. Section 1.401(l)-5 shall not be exceeded with respect
to any Participant when all qualified plans of the Company and any Affiliate are
taken into account. For purposes of applying the overall permitted disparity
limits:
(a) the annual permitted disparity limit shall be satisfied
without reducing the disparity provided under this Plan; and
15
(b) the benefit under Section 3.1(b) of a Participant who
reaches his cumulative permitted disparity limit described in Treas.
Reg. Section 1.401(1)-5(c) prior to accruing a total of 40 Benefit Years
shall equal the sum of:
(1) the sum of (A) a percentage of his average annual
base salary during his consecutive months of employment with the Company
that yield the highest twelve month average equal to 5% plus 1.2% for each
of his Benefit Years earned prior to the date the Participant reaches the
cumulative permitted disparity limit, and (B) 0.35% of such highest
average annual base salary in excess of Covered Compensation as of the
date of reference, multiplied by his Benefit Years earned prior to the
date the Participant reaches the cumulative permitted disparity limit;
plus
(2) A percentage of his average annual base salary
during his 60 consecutive months of employment with the Company that yield
the highest twelve month average equal to 1.55% for each of his Benefit
Years earned after the date the Participant reaches his cumulative
permitted disparity limit, provided that the Benefit Years taken into
account under this Section 3.4(b)(2) when added to the Benefit Years taken
into account under Section 3.4(b)(1) do not exceed a total of 40 years.
ARTICLE IV. Benefits.
4.1 Normal Retirement. If an Active Participant has not already
become vested pursuant to Section 4.4, he shall become fully vested in his
Accrued Benefit when he attains Age 65, or, if later, upon the fifth anniversary
of the date upon which he first became an Active Participant and may retire on
his Normal Retirement Date. Upon retiring, the Participant shall be entitled to
a monthly annuity that begins as of the first day of the month following the
month in which his Normal Retirement Date occurs and is equal to his Accrued
Benefit.
4.2 Postponed Retirement.
(a) An employee may continue in service after his Normal
Retirement Date. Except as provided in Section 4.12, an Active Participant
who continues in service after his Normal Retirement Date shall receive an
annuity commencing as of the first day of the month following actual
retirement, or as of his Required Beginning Date, if earlier. Such annuity
shall be based upon service, Compensation, average annual base salary and
Covered Compensation measured as of the date he retires or his Required
Beginning Date, whichever applies, and the benefit formula under Section
3.1 in effect as of such date. Effective as of January 1, 2000, the
annuity for an Employee whose Retirement Beginning Date is April 1 of the
calendar year following the year in which he incurs a Separation from
Service shall include an Actuarial Equivalent adjustment to reflect
commencement of payments after April 1 following the calendar year in
which he attained age 70 1/2. The Actuarial Equivalent adjustment
described in the preceding sentence shall be made to Participant's Accrued
Benefit as of each December 31 following his Required Beginning Date and
preceding his Separation from Service, with the last such adjustment made
as of his Separation from Service, and for each such year or portion of a
year, shall reduce (but not below zero) any increase in the Participant's
Accrued Benefit for the year or portion of a year attributable to Benefit
Years,
16
Compensation, annual base salary, or changes in Covered Compensation for
that year or portion of a year.
(b) Notwithstanding Paragraph (a), effective January 1, 1994,
an executive shall continue as an Employee after his Normal Retirement
Date only with the consent of the Company or an Affiliate. For purposes of
this Paragraph (b), an "executive" means a Participant who:
(1) Is (A) bona fide executive as defined in Title 29
Code of Federal Regulations Sections 541.1 and 1625.12 or (B) employed in
a high policy making position in the Company or an Affiliate within the
meaning of Title 29 Code of Federal Regulations Section 1625.12;
(2) Has attained Age 65;
(3) Has been in a position described in Paragraph (1)
for the two-year period immediately prior to his retirement; and
(4) Is entitled to an immediate vested annual retirement
pension, commencing at Age 65 (or retirement, if later), from all employee
pension, profit sharing, savings and deferred compensation plans sponsored
by the Company and all Affiliates which equals, in the aggregate, at least
$44,000 (or such other amount as may be prescribed pursuant to Title 29
Code of Federal Regulations Section 541.1 from time to time). In
calculating the annual retirement pension, (A) all benefits shall be
adjusted in accordance with regulations prescribed by the Equal Employment
Opportunity Commission so that the benefit is the equivalent of a Single
Life Annuity (with no ancillary benefits) under a plan to which employees
do not contribute and under which no rollover contributions have been made
and (B) there shall be excluded from the calculation of the retirement
pension amounts attributable to Social Security, employee contributions,
contributions of prior employers, rollover contributions, and
contributions described in Code Section 402(e)(3).
(c) If a Participant's Benefit Commencement Date precedes his
actual retirement, the pension payable to the Participant shall be
determined as of the December 31 preceding his Benefit Commencement Date
and adjusted as of January 1 in each calendar year following his Benefit
Commencement Date, with the final adjustment to be made as of the date of
his actual retirement. Such annual adjustment shall include any increase
(but not any decrease) in the Participant's Accrued Benefit, determined in
accordance with Article III, as a result of additional Benefit Years and
Compensation and changes to average annual base salary, since the
Participant's Benefit Commencement Date or the last such annual
adjustment, whichever applies.
4.3 Early Retirement.
(a) Effective August 1, 2000, an Active Participant who
terminates after he has attained Age 50 and has to his credit at least 10
Vesting Years may retire and shall upon so retiring be entitled to a
monthly annuity that begins, at his election, as of the first day of the
month following his retirement or as of the first day of any subsequent
17
month, but not after the first month following his Normal Retirement Date.
Such election may be made no earlier than 90 days prior to the Benefit
Commencement Date elected by the Participant and in no event earlier than
the date on which the Participant receives the notice described in Section
5.5(a). The amount of the annuity under this Subsection 4.3(a) shall be
equal to the Participant's Accrued Benefit determined as of his Separation
from Service reduced as follows:
Attained Age at Reduction
Separation from Service Factor
64-60 1.00
59 0.98
58 0.96
57 0.93
56 0.90
55 0.87
54 0.84
53 0.81
52 0.78
51 0.75
50 0.72
Notwithstanding the foregoing provisions of this subsection (a), effective
January 1, 2002, there shall be no reduction to the Accrued Benefit of an
Active Participant who is an hourly, nonexempt Eligible Employee and who
has attained age 59 at the time of his Separation from Service.
(b) Notwithstanding any other provision of the Plan to the
contrary, a Participant who has ceased to be an Active Participant because
he is an EIS Senior Management Employee, or because he has ceased to be an
Employee of the Company and has thereupon become an Employee of EIS, shall
continue to be treated as an Active Participant for purposes of this
Section 4.3 and, effective January 1, 2002, Section 5.3, but not for any
other provision of the Plan, so long as (i) he continuously remains an
Employee of EIS or a wholly owned subsidiary of EIS and (ii) EIS
continuously remains an Affiliate.
(c) Notwithstanding any other provision of the Plan to the
contrary, a Participant who has ceased to be an Eligible Employee and
Active Participant because he is a Power Team Employee, shall continue to
be treated as an Active Participant for purposes of this Section 4.3 and,
effective December 31, 1996, Section 5.3, but not for any other provision
of the Plan, so long as he continuously remains a Power Team Employee.
4.4 Deferred Annuity. Effective as of August 1, 2000, any
Participant who has a Separation from Service prior to satisfying the
requirements for retirement under Sections 4.1-4.3 but at a time when he has to
his credit at least five Vesting Years shall upon his Separation from Service be
entitled to receive a monthly annuity that begins as of the first day of
18
the month following his Normal Retirement Date and is equal to his Accrued
Benefit determined as of his Separation from Service. Alternatively, a
Participant described in the preceding sentence may, at his election, receive a
monthly annuity that begins as of the first day of the month following his
fiftieth birthday or, at his option, on the first day of any month thereafter
but not after the first month following his Normal Retirement Date that is equal
to the Actuarial Equivalent of the Participant's Accrued Benefit determined as
of his Separation from Service. Any election of a Benefit Commencement Date
prior to Normal Retirement Date made under this Section may be made no earlier
than 90 days prior to the Benefit Commencement Date elected by the Participant
and in no event earlier than the date on which the Participant receives the
notice described in Section 5.5(a).
4.5 Disabled Eligible Employees. A Participant who has become
disabled within the meaning of the Company's Disabilitant benefit plans while an
Eligible Employee shall continue to be credited with Benefit Years and Vesting
Years during his period of Disabilitant to the extent set forth in Sections 1.6,
1.8, 1.17 and 1.33. If a disabled Participant has met the requirements to
receive a pension under any Section of this Article IV (determined as if his
Separation from Service had occurred on the date of reference), such Participant
may elect as his Benefit Commencement Date any date as may be provided under the
applicable Section. If a disabled Participant continues to be credited with
Benefit Years after his Benefit Commencement Date, the amount of annuity payable
to the Participant shall be determined as of his Benefit Commencement Date and
shall be adjusted annually as of January 1 in each calendar year following his
Benefit Commencement Date, up to and including the January 1 next following the
date the disabled Participant ceases to be credited with Benefit Years. Such
annual adjustment shall include any increase (but not any decrease) in the
Participant's Accrued Benefit, determined in accordance with Article III, as a
result of additional Benefit Years and Compensation and changes to average
annual base salary, since the Participant's Benefit Commencement Date or the
last such annual adjustment, whichever applies. In addition, such annual
adjustment shall be reduced (but not below zero) by the Actuarial Equivalent of
any benefit paid to the Participant since his Benefit Commencement Date during
any period (a) prior to Normal Retirement Date or (b) after Normal Retirement
Date that would have constituted "Section 202(a)(3)(B) Service" under Title 29
Code of Federal Regulations Section 2530.203-3(c)(1), to the extent not
previously taken into account under this Section; provided, however, that the
amount, if any, of the benefits paid to the Participant which exceeds the amount
the Participant would have received if distribution had been made in the normal
form of benefits described in Section 5.1 or 5.2(a), whichever applies to the
Participant, shall be disregarded in determining the Actuarial Equivalent of
such benefits for purposes of the reduction described in this sentence.
4.6 Maximum Annuity. The annuity of a Participant shall be subject
to the following rules:
(a) The aggregate annual annuity to which any Participant may
become entitled under this Plan and the qualified defined benefit plan of
any Affiliate shall be a Qualified Joint and Survivor Annuity, or another
form of annuity Actuarially Equivalent to a lifetime annuity (without
death benefits), in an amount equal to the lesser of (1) $90,000 (or such
other figure applicable under Section 415(b)(1)(A) of the Internal Revenue
Code), or (2) 100% of his average annual Earnings from the Company or an
Affiliate in the thirty-six consecutive months which yield the highest
average.
19
(b) For a Participant who has to his credit fewer than ten
Vesting Years, the limitations described in Paragraphs (a)(2) above and
(e) below shall be one-tenth of the applicable limit multiplied by the
number of his Vesting Years. For a Participant who has been an Active
Participant for fewer than 10 full years at the time that retirement
benefits begin, the dollar limitation described in Paragraph (a)(1) above
shall be one-tenth of the applicable limit multiplied by the Participant's
years as an Active Participant.
(c) The dollar limitation referred to in Paragraphs (a)(1) and
(d)(1) shall be increased by using an interest rate equal to 5% per year
and the mortality table described in Section 417(e)(3)(A)(ii)(I) for
benefits commencing after Social Security Retirement Age. In the event
that the Participant's benefits become payable before the Social Security
Retirement Age, the dollar limitation shall be decreased to provide the
Actuarial Equivalent of an annuity equal to such limitation commencing at
the Age at which benefit payments begin in accordance with Section
415(b)(2)(C) of the Code. For purposes of this decrease, the reduction is
the same as the reduction in Social Security benefits for benefits that
begin to be paid on or after Age 62, and in reducing benefits commencing
prior to Age 62, the interest rate used shall be 5%, except as may
otherwise be provided in Section 4A.3(a)(2)(D) or 4B.3(a)(2)(C), and the
mortality table used shall be as described in Section 417(e)(3)(A)(ii)(I)
of the Code. If a Participant's benefits are payable in a form subject to
Section 417(e)(3) of the Code, such benefits shall be adjusted, for
purposes of applying the limitations under this Section 4.6, to their
Actuarial Equivalent in the form of a straight life annuity with no
ancillary benefits, using the interest and mortality assumption described
in the second paragraph of Appendix A to this Plan.
(d) This Section 4.6(d) applies to Participants who, as of
January 1, 2000: (i) had an Accrued Benefit and (ii) were not Active
Participants, and shall continue to apply to such Participants until such
time as they again become Active Participants. The benefits for any such
Participant under this Plan shall not exceed the amount that would cause
the sum of his defined benefit and his defined contribution fraction for
the year to equal 1.0.
(1) A Participant's defined benefit fraction for a given
limitation year is a fraction, the numerator of which is his projected
annual benefit under this Plan and any other defined benefit plan
maintained by the Company or an Affiliate and the denominator of which is
the lesser of (A) 1.25 multiplied by $90,000 (or such other dollar
limitation as in effect for the limitation year under Section 415(b)(1)(A)
of the Code, reduced in accordance with Section 415(b)(2) and 415(b)(5) of
the Code, if applicable), or (B) 1.4 multiplied by 100% of his average
annual Earnings from the Company or any Affiliate in the thirty-six
consecutive months of active participation which yield the highest
average.
(2) A Participant's defined contribution fraction for a
given limitation year is a fraction, the numerator of which is the sum of
his annual additions for all limitation years and the denominator of which
is the sum of his maximum aggregate amounts for all limitation years in
which he is an Employee. A Participant's maximum
20
aggregate amounts for any limitation year shall equal the lesser of 1.25
multiplied by the dollar limitation applicable under Section 415(c) of the
Code for such limitation year or 1.4 multiplied by the percentage
limitation under Section 415(c) of the Code for such limitation year.
Except as otherwise provided in Section 415(c) of the Code, the maximum
annual addition to a Participant's account for any limitation year is the
lesser of $30,000 (or such other amount as may be permitted for qualified
defined contribution plans), or 25% of the Participant's Earnings for that
year from the Company or an Affiliate. For all limitation years ending
before January 1, 1976, the maximum annual addition shall be deemed to be
the lesser of $25,000 or 25% of the Participant's Earnings for that year
from the Company or an Affiliate.
(3) Notwithstanding the above, if the Plan satisfied
Section 415 of the Code as in effect for the last limitation year
beginning prior to January 1, 1987, an amount shall be permanently
subtracted from the numerator of the defined contribution fraction (not
exceeding such numerator) as prescribed by the Secretary of the Treasury
so that the sum of the defined benefit and defined contribution fractions
computed under Section 415(e)(1) of the Code as amended effective January
1, 1987, does not exceed 1.0 for such limitation year.
(e) The annual annuity payable with respect to a Participant
may exceed 100% of his average annual Earnings in the 36 consecutive
months of active participation which yield the highest average, if (1) the
annual annuity does not exceed $10,000 for the current Plan Year or any
prior Plan Year, and (2) the Participant has at no time participated in a
defined contribution plan maintained by the Company or an Affiliate.
(f) For purposes of this Section:
(1) "Earnings" means wages for Federal tax withholding
purposes, as defined in Section 3401(a) of the Code, but determined
without regard to any rules that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed. Effective December 22, 1994, Earnings shall include amounts
that a Participant would have received during a period of Qualified
Military Service (or, if such amounts are not reasonably certain, the
Participant's average Compensation for the twelve-month period immediately
preceding the Participant's Qualified Military Service); provided,
however, that the Participant returns to work with a Company or an
Affiliate. Effective for Plan Years beginning on or after January 1, 1998,
Earnings shall include "elective deferrals" as defined in section
402(g)(3) of the Code and amounts that are excluded from gross income
under Section 125 or 457 of the Code, and effective for Plan Years
beginning after December 31, 2000, amounts that are excluded from gross
income under Section 132(f)(4) of the Code.
(2) The annual addition to a Participant's account for
any limitation year is the sum, determined with respect to all qualified
defined contribution plans of the Company and all Affiliates (including
the voluntary contributions feature of any defined benefit plan thereof),
of:
21
(A) Company contributions and forfeitures
allocated to the Participant's account; plus
(B) for limitation years beginning prior to
January 1, 1987, the lesser of (i) 50% of his contributions, or (ii) (a)
for each calendar year after 1975 the amount by which the Participant's
contributions exceed 6% of his cash remuneration or (b) for each
limitation year before 1976 during which he was a Participant, the excess
of the aggregate amount of his contributions for all such years over 10%
of his aggregate cash remuneration from the Company or an Affiliate for
all such years, multiplied by a fraction the numerator of which is one and
the denominator of which is the number of such years; for limitation years
beginning on or after January 1, 1987, the total amount of the
Participant's contributions; plus
(C) amounts allocated to any Participant after
March 31, 1984 in an individual medical account (within the meaning of
Code Section 415(l)(2)) which is part of a pension or an annuity plan
maintained by the Company or an Affiliate; plus
(D) amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date
which are attributable to post-retirement medical benefits allocated to a
separate account of a Participant who is a key employee, as defined in
Section 419A(d)(3) of the Code, under a welfare benefit fund maintained by
the Company or an Affiliate.
(g) The limitations described in this Section shall become
effective with respect to the Plan and Participants as is required to
comply with Section 415 of the Code as amended by the Tax Reform Act of
1986 and subsequent legislation, but shall not reduce any benefit which
was accrued by a Participant under the Plan prior to the first day of the
limitation year beginning in 1987, using the applicable maximum dollar
limitations then in effect; provided, however, that this sentence shall
not apply to any Participant who was not a Participant as of the first day
of the first limitation year that began in 1987. For purposes of this
Paragraph (g), no change in the Plan after May 5, 1986 and no cost of
living adjustment after May 5, 1986 shall be taken into account.
(h) If a Participant's benefit is otherwise limited by this
Section, the benefit payable to the Participant and/or the Participant's
surviving spouse under Section 5.2(a), 5.3 or 5.4 shall be based upon the
Participant's benefit determined without regard to this Section, and the
limitations of this Section shall apply to the resulting benefit payable
to the Participant and/or his surviving spouse.
(i) Effective January 1, 1990, the limitation of Section
415(b)(1)(A) of the Code in Paragraph (a)(1) will be automatically
adjusted for former Active Participants by multiplying such limit by the
cost of living adjustment factor prescribed by the Secretary of the
Treasury under Section 415(d) of the Code in such manner as the Secretary
shall prescribe. The limitation of Section 415(b)(1)(B) of the Code shall
be automatically adjusted for former Active Participants who have
separated from service to reflect the cost of living adjustment factor
prescribed by the Secretary of the Treasury
22
under Section 415(d) of the Code in such manner as the Secretary shall
prescribe. The new limitation will apply to limitation years ending within
the calendar year of the date of the adjustment. Subject to subsection
4.6(d), the pension paid to any retired Participant shall be automatically
adjusted to reflect the maximum amount allowable under Section 415(b) of
the Code for such limitation year. Notwithstanding the above, the
adjustment described in this Paragraph (i) shall not be made for a
Participant who has received a single sum benefit payment from a
nonqualified deferred compensation plan sponsored by the Company to the
extent that such adjustment would provide benefits for which the
Participant has previously been compensated by virtue of the single sum
payment.
4.7 Early Retirement Supplement. A Participant whose Employment Date
is prior to January 1, 1972, and who retires under Section 4.3 at or after Age
55 with 20 or more Benefit Years shall be entitled to a benefit equal to the
greater of:
(a) that provided in Section 4.3; or
(b) (1) with respect to such a Participant who retires prior
to January 1, 1994, the benefit the Participant would have received under
the provisions of the Plan as in effect on December 31, 1971, assuming the
Participant's "normal retirement date" under the Plan as then in effect
was Age 60; or
(2) with respect to such a Participant who retires after
December 31, 1993, the benefit the Participant would have accrued as of
December 31, 1993 if the provisions of the Plan as in effect on December
31, 1971 had remained in effect until such date, reduced for early
commencement under the provisions of the Plan as in effect on December 31,
1971 assuming the Participant's "normal retirement date" under the Plan as
then in effect was Age 60.
4.8 Benefit Commencement Date. Unless the Participant elects
otherwise, the pension to which he is entitled under this Article IV or Articles
IVA or IVB shall begin within sixty days of the close of the Plan Year in which
falls the later of his Normal Retirement Date or his Separation from Service.
The failure of the Participant to apply for his benefit pursuant to Section 5.9
by the date prescribed in the preceding sentence shall be deemed an election to
defer payment to a later date. Notwithstanding the above, payment of such
pension shall begin no later than a Participant's Required Beginning Date, or
the first day of the month following the date the Participant first becomes
entitled to such pension, if later.
4.9 Post-Retirement Adjustment.
(a) Commencing with installments due September 1, 1978,
benefit payments to Participants who retired under Sections 4.1, 4.2 or
4.3, or corresponding prior sections, prior to January 1, 1978 and their
Contingent Annuity Option beneficiaries are increased by 2% for each
calendar year of retirement to a maximum of 4%.
(b) Commencing with installments due September 1, 1980,
benefit payments to Participants who retired under the foregoing
provisions of the Plan prior to
23
January 1, 1980 and their Contingent Annuity Option beneficiaries are
increased by 3% for each calendar year of retirement to a maximum of 6%.
(c) Commencing with installments due September 1, 1982,
benefit payments to Participants who retired under the foregoing
provisions of the Plan prior to January 1, 1982 and their Contingent
Annuity Option beneficiaries are increased by 3% for each calendar year of
retirement to a maximum of 6%.
(d) Commencing with installments due September 1, 1984,
benefit payments to Participants who retired under the foregoing
provisions of the Plan prior to January 1, 1984, and their Contingent
Annuity Option beneficiaries are increased by 2% for each calendar year of
retirement to a maximum of 4%.
(e) Commencing with installments due September 1, 1986,
benefit payments to Participants who retired under the foregoing
provisions of the Plan prior to January 1, 1986, and their Contingent
Annuity Option beneficiaries are increased by 2% for each calendar year of
retirement to a maximum of 4%.
(f) Commencing with installments due February 1, 1991, benefit
payments to:
(1) Participants who retired under Section 4.1, 4.2 or
4.3 of the Plan (or corresponding prior sections) prior to January 1,
1990;
(2) Contingent Annuity Option beneficiaries of deceased
Participants who died or retired under the foregoing provisions prior to
January 1, 1990;
(3) Qualified Joint and Survivor Annuity beneficiaries
of deceased Participants who retired under the foregoing provisions prior
to January 1, 1990; and
(4) surviving spouses receiving benefits under Section
5.4 due to the death of a Participant while an Active Participant prior to
January 1, 1990, are increased by a factor of 3/4 of 1% multiplied by the
difference obtained by subtracting the Participant's year of retirement or
death, as appropriate, from 1990. A Participant or beneficiary described
in this Paragraph (f) may irrevocably elect to waive this increase in
benefit payments by written notice to the Company made no later than 60
days after the Participant or beneficiary is first notified of the
increase by the Company.
(g) Commencing with installments due February 1, 1997, benefit
payments to Participants who retired under the foregoing provisions of the
Plan prior to January 1, 1994, and Contingent Annuity Option beneficiaries
of deceased Participants who died or retired under the foregoing
provisions of the Plan prior to January 1, 1994, are increased by fifty
dollars ($50) per month.
(h) Commencing with installments due January 1, 2000, benefit
payments to Participants who retired under the foregoing provisions of the
Plan prior to January 1, 1994, and Contingent Annuity Option beneficiaries
of deceased Participants
24
who died or retired under the foregoing provisions of the Plan prior to
January 1, 1994, are increased by fifty dollars ($50) per month.
4.10. Special Early Retirement Benefit. The annuity (and any
Contingent Annuity Option benefit) of a Participant who retires under the early
retirement provisions of Section 4.3 between February 1, 1978 and June 1, 1978,
inclusive, shall be computed without the 4% per year reduction described in the
last sentence of Section 4.3. In addition, the monthly benefit paid to such a
Participant (but not the benefit to any Contingent Annuity Option beneficiary)
shall be supplemented by a monthly payment equal to the Social Security old age
insurance benefit to which the Participant would be entitled at Age 65 based on
earnings received as an Employee of the Company, assuming he has no wages for
Social Security purposes after his retirement and there is no change in the
Social Security law or rates subsequent to his retirement. The supplemental
benefit described in the preceding sentence shall end with the payment on the
first day of the month preceding the month in which the Participant first
receives (or could have received if he had applied) Social Security old age
insurance benefits unreduced on account of age, or with the payment last
preceding the Participant's death, if earlier. The special benefits described in
this section shall also be paid with respect to a Participant who elects early
retirement during the period February 1, 1978 through June 1, 1978, inclusive,
but whose actual retirement is postponed at the request of the Company in order
to provide for personnel replacement and training.
4.11 Minimum Annuity. The annuity of a Participant who retires or
has retired under Sections 4.1, 4.2 or 4.3, or corresponding prior sections
regardless of the form of his benefit under Article V, and who is not at any
time a Highly Compensated Employee, shall not be less than $150 per month.
4.12 Suspension of Benefits. With respect to any Participant whose
employment by the Company or an Affiliate continues past his Normal Retirement
Date, or who is receiving benefits under the Plan and again becomes an Employee,
the following rules shall apply:
(a) If the reemployed Participant has not reached his Normal
Retirement Date, his pension shall be suspended and recomputed under the
Plan upon his subsequent Separation from Service.
(b) If the Participant has reached his Normal Retirement Date,
for each calendar month or for each four or five week payroll period
ending in a calendar month during which the Participant either completes
forty or more Hours of Service (counting each day of Employment as five
Hours of Service), or receives payment for any such Hours of Service
performed on each of eight or more days or separate work shifts in such
month or payroll period, (referred to herein as "Suspension Service") no
pension payment shall be made, and no adjustment to the Participant's
pension shall be made on account of such non-payment. No payment shall be
withheld pursuant to this Paragraph (b) until the Employee is notified by
personal delivery or first class mail during the first calendar month or
payroll period in which payments are suspended that his benefits are
suspended. Such notification shall contain a description of the specific
reasons why benefit payments are being suspended, a general description of
the Plan provisions relating to the
25
suspension of payments and a copy of such provisions (or a reference to
the relevant pages of the summary plan description providing such
information), and a statement to the effect that applicable Department of
Labor Regulations may be found in Section 2530.203-3 of the Code of
Federal Regulations. In addition, the suspension notification shall inform
the Employee of the Plan's procedure for affording a review of the
suspension of benefits.
(c) The pension of a reemployed Participant whose benefits
were suspended under this Section 4.12 shall begin again no later than the
earlier of (1) the first day of the third month following the month in
which the Participant first fails to satisfy the service requirements
described in Paragraph (b) or has a Separation from Service or (2) his
Required Beginning Date. The resumed pension shall be recalculated to
reflect Compensation, average annual base salary and Benefit Years earned
under the Plan as in effect during such period of reemployment and shall
be reduced by the Actuarial Equivalent of any payment received by the
Employee under the Plan prior to his Normal Retirement Date; provided,
however, that in no event shall the Participant's monthly pension payable
in the form of a single life annuity when reemployment ends be less than
the monthly pension that was payable to the Participant in the form of a
single life annuity prior to his period of reemployment. The full amount
of the resumed pension shall be paid in the form determined pursuant to
Article V at the time payments are resumed, without regard to the form of
payment in effect for the Participant prior to his reemployment. The
pension of any Participant whose employment continued past his Normal
Retirement Date (and whose benefits are not suspended because of
employment as described in Paragraph (b)) shall be paid pursuant to
Section 4.2.
(d) Notwithstanding the foregoing provisions of this Section
4.12, a Participant who received a pension while the Participant worked
for Linden Chapel Corporation (formerly known as VSI Group, Inc., a
Maryland corporation) before the assets of Linden Chapel Corporation
(formerly known as VSI Group, Inc., a Maryland corporation) were acquired
by EIS or its Affiliate, shall not have his or her pension suspended under
this Section 4.12 solely as a result of the acquisition of the assets of
Linden Chapel Corporation (formerly known as VSI Group, Inc., a Maryland
corporation) by EIS or its Affiliate, so long as the Participant remains
continuously employed thereafter by the Company or an Affiliate.
ARTICLE IVA. Special Limited Duration Early Retirement Benefit.
4A.1 Eligibility.
(a) The special limited duration early retirement benefit
described in Section 4A.3 shall be available to any Active Participant
who:
(1) as of December 31, 1990, has attained Age 50 and has
to his credit at least five Benefit Years; and
26
(2) makes a Special Early Retirement Election in
accordance with the provisions of Section 4A.2 and does not withdraw such
Election on or before September 15, 1990 as provided in Section 4A.2(b).
(b) The Accrued Benefit of an Active Participant who satisfies
the requirements of Paragraph (a)(1) above and who dies after July 14,
1990, but before September 16, 1990, shall be calculated under Section
4A.3 as of the date of his death for purposes of determining any death
benefit payable on behalf of the Participant pursuant to Section 5.3 or
5.4, notwithstanding his failure to satisfy the requirement of Paragraph
(a)(2) above.
4A.2 Special Early Retirement Election.
(a) for the purposes of this Article, a "Special Early
Retirement Election" is a written election that:
(1) is submitted to the Plan Administrator on or after
July 15, 1990 and on or before September 15, 1990; and
(2) that indicates the Active Participant's intent to
retire from employment with the Company:
(A) if the Active Participant elects to
participate in the Company's Service Completion Plan, on his "Service
Completion Date" (as defined in Section 4A.4(c)(2) below); or
(B) if the Active Participant does not elect to
participate in the Company's Service Completion Plan, on August 1, 1990,
September 1, 1990, or October 1, 1990;
provided, however, that the election described in Section 4A.2(a)(2)(A)
shall not be available to an Active Participant described in Section
4A.4(c)(1)(B).
(b) An Active Participant's Special Early Retirement Election
shall become irrevocable as of September 15, 1990 if it has not been
withdrawn by the Active Participant on or before such date.
4A.3 Benefits. Notwithstanding anything to the contrary contained in
the Plan, each Active Participant who satisfies the requirements of Section 4A.1
shall be entitled to retire on the following terms:
(a) (1) Notwithstanding the provisions of Section 3.1, each
Active Participant who satisfies the requirements of Section 4A.1 shall
have an Accrued Benefit equal to one-twelfth of the greater of:
(A) the sum of (i) 2% of his average annual
Compensation during the period of his service, if any, between January 1,
1930 and
27
December 31, 1938, inclusive, multiplied by his Benefit Years before
January 1, 1939, and (ii) 2% of his aggregate Compensation for employment
after December 31, 1938, or
(B) the sum of (i) a percentage of his average
annual base salary during his 60 consecutive months of employment with the
Company that yield the highest twelve month average equal to 5%, plus 1.2%
multiplied by the sum of five plus his number of Benefit Years determined
as of his Separation from Service (to a maximum of 45), and (ii) 0.35% of
such highest average annual base salary in excess of Covered Compensation
as of the date of reference, multiplied by his Benefit Years (up to a
maximum of 14%);
(2) Notwithstanding the above, the Accrued Benefit of an
Active Participant who satisfies the requirements of Section 4A.1 shall
not exceed the maximum amount permissible under Sections 401(l) and 415 of
the Code when such limitations are applied as follows:
(A) The limitations of Sections 401(l) and 415
shall be applied in the following order of priority: (I) prior to August
3, 1992, the ten-year phase-in limitation applicable to changes in the
benefit structure under Section 415(b)(1)(5)(D) of the Code; (II) the
limitations on the maximum excess allowance applicable when unreduced
benefits are payable prior to social security retirement age as described
under Section 401(l)(5)(F)(i) of the Code; and (III) the limitation
described in Section 415(b)(1) of the Code;
(B) The ten-year phase-in limitation described in
Subsection (A)(I) above shall apply to changes in benefits resulting from
the crediting of five additional Benefit Years under Section
4A.3(a)(1)(B)(I); provided, however, that such limitation shall cease to
apply on and after August 3, 1992;
(C) The limitations on the maximum excess
allowance described in Subsection (A)(II) above shall apply only to such
Participants who are Highly Compensated Employees at any time after 1989
and prior to Separation from Service; and
(D) For purposes of the limitations described in
Subsections (A)(I) and (A)(III) above, the following actuarial assumptions
shall be used to determine adjusted limitations for Participants whose
benefit payments commence prior to Age 55: (I) 5% interest; and (II) the
1971 Forecast Mortality Table with a one-year age rating.
(3) For the purposes of Section 4A.3(a)(1)(B) above:
(A) employment during the most recent five years
shall include absences which are included in Employment, except an absence
during which an Employee receives benefits under the Company's
Disabilitant Plan, and the average annual base salary of an Employee on an
included absence shall be calculated as if his base salary continued
during any period of such absence for which he did not receive
28
Compensation, such salary to be that in effect when such period began,
adjusted for increases applicable to his job classification which occur
prior to the end of such period;
(B) for any 12-consecutive-month period taken
into account in determining a Participant's average annual base salary, a
Participant's annual base salary shall not exceed $200,000 (or such other
amount as may apply under Section 401(a)(17) of the Code for the calendar
year in which the last of such 12-consecutive-month periods ends.) In
determining annual base salary, the family aggregation rules of Section
401(a)(17)(A) of the Code, as in effect prior to January 1, 1997, shall
apply.
(C) a Participant's annual base salary shall not
include any lump sum payment of accrued vacation or sick pay, nor any
severance payment made by the Company or an Affiliate or pursuant to any
plan maintained by the Company or an Affiliate.
(b) for the purposes of determining the date as of which the
Active Participant may commence receiving his pension pursuant to Article
IV, and his ability to elect a Contingent Annuity Option pursuant to
Section 5.3, the Active Participant:
(1) shall be credited with his actual number of Vesting
Years as of his Separation from Service, plus five Vesting Years; and
(2) shall be deemed to be his actual Age as of the later
of his Separation from Service or December 31, 1990, plus five years;
provided, however, that the Actuarial Equivalent of his Accrued Benefit
shall be calculated based on his actual Age as of his Benefit Commencement
Date.
(c) If the Participant's annuity (including any Contingent
Annuity Option benefit) is paid pursuant to Section 4.3, such annuity
shall be computed without regard to the 4% per year reduction described in
the last sentence of such Section.
4A.4 Special Rules. Notwithstanding anything to the contrary
contained in the Plan:
(a) The minimum pension payable to an Active Participant who
makes a Special Early Retirement Election shall be equal to the pension
otherwise payable to him under the Plan, determined without regard to the
provisions of this Article IVA (other than the limitations described in
Section 4A.3(a)(2)), multiplied by one hundred five percent (105%).
(b) If, at the time of making a Special Early Retirement
Election under Section 4A.2, an Active Participant elects any Contingent
Annuity Option, the election of such option shall become effective
immediately.
(c) The following additional definitions shall apply for
purposes of this Article IVA:
29
(1) An "Active Participant" shall mean an Active
Participant as defined in Section 1.2, including (A) a Participant who is
an Eligible Employee at least one day on or after July 15, 1990 and on or
before September 15, 1990 and (B) a Participant not described in (A) who
is absent from Employment by reason of his Disabilitant on account of
illness or accident.
(2) An Active Participant's "Service Completion Date"
shall be the date specified by the Company as the date as of which his
services will no longer be required by the Company. In no event, however,
will any Active Participant's Service Completion Date be later than
December 1, 1992. Each Active Participant who makes a Special Early
Retirement Election shall receive written notification from the Company on
or before December 1, 1990 specifying the calendar quarter in which or the
date on which his services will no longer be required by the Company.
ARTICLE IVB. Nuclear Voluntary Retirement Incentive Plan.
4B.1 Eligibility.
(a) The voluntary retirement incentive plan benefit described
in Section 4B.3 shall be available to any Participant who:
(1) as of December 1, 1992 is on the Nuclear Group
payroll;
(2) as of March 31, 1993, will have attained Age 50 and
have to his credit at least 5 Benefit Years; and
(3) makes a Voluntary Early Retirement Election in
accordance with the provisions of Section 4B.2 and does not withdraw such
Election as provided in Section 4B.2(b).
(b) The Accrued Benefit of a Participant who satisfies the
requirements of Paragraphs (a)(1) and (2) above and who dies after
December 9, 1992, but before January 26, 1993, shall be calculated under
Section 4B.3 as of the date of his death for purposes of determining any
death benefit payable on behalf of the Participant pursuant to Section 5.3
or 5.4, notwithstanding his failure to satisfy the requirement of
Paragraph (a)(3) above.
4B.2 Voluntary Early Retirement Election.
(a) For the purposes of this Article, a "Voluntary Early
Retirement Election" is a written election that:
(1) is submitted to the Plan Administrator on or after
December 10, 1992 and on or before January 25, 1993, together with a
signed full waiver and release of claims form; and
30
(2) indicates the Participant's intent to retire from
employment with the Company on March 1, 1993, May 1, 1993 or July 1, 1993,
as prescribed for the Participant in the personal election form provided
to the Participant by the Company.
(b) A Participant's Voluntary Early Retirement Election shall
become irrevocable if it is not withdrawn by the Participant, in writing
in a form acceptable to the Plan Administrator, within seven (7) days
following the date such Voluntary Early Retirement Election is submitted
to the Administrator by the Participant.
4B.3 Benefits. Notwithstanding anything to the contrary contained in
the Plan, each Participant who satisfies the requirements of Section 4B.1 shall
be entitled to retire on the following terms:
(a) (1) Notwithstanding the provisions of Section 3.1 (other
than the last sentence of Section 3.1(b)), each Participant who satisfies
the requirements of Section 4B.1 shall have an Accrued Benefit equal to
one-twelfth of the greater of:
(A) the sum of (I) 2% of his average annual
Compensation during the period of his service, if any, between January 1,
1930 and December 31, 1938, inclusive, multiplied by his Benefit Years
before January 1, 1939, and (II) 2% of his aggregate Compensation for
employment after December 31, 1938, or
(B) the sum of (I) a percentage of his average
annual base salary during his 60 consecutive months of employment with the
Company that yield the highest twelve month average equal to 5%, plus 1.2%
multiplied by the sum of five plus his number of Benefit Years determined
as of his Separation from Service (to a maximum of 45 Benefit Years), and
(II) 0.35% of such highest average annual base salary in excess of Covered
Compensation as of the date of reference, multiplied by his Benefit Years
(up to a maximum of 14%);
(2) Notwithstanding the above, the Accrued Benefit of a
Participant who satisfies the requirements of Section 4B.1 shall not
exceed the maximum amount permissible under Sections 401(l) and 415 of the
Code when such limitations are applied as follows:
(A) The limitations of Sections 401(l) and 415
shall be applied in the following order of priority: (I) the limitations
on the maximum excess allowance applicable when unreduced benefits are
payable prior to social security retirement age as described under Section
401(l)(5)(F)(i) of the Code; and (II) the limitation described in Section
415(b)(1) of the Code;
(B) The limitations on the maximum excess
allowance described in Subparagraph (A)(I) above shall apply only to such
Participants who are Highly Compensated Employees at any time after 1991
and prior to Separation from Service; and
(C) For purposes of the limitation described in
Subparagraph (A)(II) above, the following actuarial assumptions shall be
used to
31
determine the adjusted limitation for Participants whose benefit payments
commence prior to Age 62: (I) 5% interest; and (II) the 1971 Forecast
Mortality Table with a one-year age rating.
(3) For purposes of Section 4B.3(a)(1) above, for any
12-consecutive-month period taken into account in determining a
Participant's average annual base salary, a Participant's annual base
salary shall not exceed $200,000 (or such other amount as may apply under
Section 401(a)(17) of the Code for the calendar year in which the last of
such 12-consecutive-month periods ends). In determining annual base
salary, the family aggregation rules of Section 401(a)(17)(A) of the Code,
as in effect prior to January 1, 1997, shall apply.
(b) For the purposes of determining the date as of which the
Participant may commence receiving his pension pursuant to Article
IV, and his ability to elect a Contingent Annuity Option pursuant to
Section 5.3, the Participant:
(1) shall be credited with his actual number of Vesting
Years as of his Separation from Service, plus 5 Vesting Years; and
(2) shall be deemed to be his actual Age as of the later
of his Separation from Service or March 31, 1993, plus 5 years; provided,
however, that the Actuarial Equivalent of his Accrued Benefit shall be
calculated based on his actual Age as of his Benefit Commencement Date.
(c) If the Participant's annuity (including any Contingent
Annuity Option benefit) is paid pursuant to Section 4.3, such annuity
shall be computed without regard to the 4% per year reduction described in
the last sentence of such Section.
4B.4 Special Rules. Notwithstanding anything to the contrary
contained in the Plan, if, at the time of making a Voluntary Early Retirement
Election under Section 4B.2, a Participant elects any Contingent Annuity Option,
the election of such option shall become effective immediately.
ARTICLE IVC. Voluntary Retirement Incentive Program.
4C.1 Eligibility.
(a) The voluntary retirement incentive program benefit
described in Section 4C.3 shall be available to any Participant who:
(1) is an Eligible Employee employed on a regular,
part-time or intermittent basis, whether actively employed or absent under
circumstances included in Employment, during the period beginning on July
5, 1994 and ending on September 16, 1994, other than an Eligible Employee
who is laid off due to loss of employment qualifications and whose recall
period ends prior to the date described for the Eligible Employee in
Section 4C.2(a)(2);
32
(2) was born before January 1, 1946, became an Eligible
Employee before January 1, 1991, and, as of December 31, 1995, will have
to his credit at least 5 Benefit Years;
(3) makes a Voluntary Early Retirement Election in
accordance with the provisions of Section 4C.2 and does not withdraw such
Election as provided in Section 4C.2(b); and
(4) continues in employment with the Company in the same
position (unless transferred at the direction of the Company) until, but
not beyond, the date described in Section 4C.2(a)(2); provided, however,
that this requirement shall not apply in the event the Participant ceases
active employment with the Company (which shall apply to both direct and
indirect employment (e.g., a leased employee)) earlier (A) due to a
Disabilitant on account of illness or accident during which the
Participant is eligible for and receives Disabilitant benefits under a
Disabilitant benefit plan sponsored by the Company; (B) because the
Company declares the Participant excess before the date described for the
Participant in Section 4C.2(a)(2); or (C) because the Company has
discharged the Participant for any reason, other than for willful
misconduct, on or after July 5, 1994.
(b) (1) The Accrued Benefit of a Participant who satisfies the
requirements of Paragraphs (a)(1) and (a)(2) above and who dies after July
4, 1994, but before September 17, 1994, shall be calculated under Section
4C.3 as of the date of his death for purposes of determining any death
benefit payable on behalf of the Participant pursuant to Section 5.3 (but
not Section 5.4), notwithstanding his failure to satisfy the requirements
of Paragraph (a)(3) and/or (a)(4) above.
(2) The Accrued Benefit of a Participant who satisfies
the requirements of Paragraphs (a)(1), (a)(2) and (a)(3) above and who
dies after July 4, 1994, but before the date described for the Participant
in Section 4C.2(a)(2), shall be calculated under Section 4C.3 as of the
date of his death for purposes of determining any death benefit payable on
behalf of the Participant pursuant to Section 5.3 or 5.4, notwithstanding
his failure to satisfy the requirements of Paragraph (a)(4) above.
4C.2 Voluntary Early Retirement Election.
(a) For the purposes of this Article, a "Voluntary Early
Retirement Election" is a written election that:
(1) is submitted to and accepted by the Plan
Administrator on or after July 5, 1994 and on or before September 16,
1994, together with a signed full waiver and release of claims form; and
(2) indicates the Participant's intent to retire from
employment with the Company (including both direct and indirect employment
(e.g., as a leased employee)) on the first of the month following the
later of (A) the Participant's release date determined from the table
below or (B) the date the Participant attains Age 50.
33
STRATEGIC BUSINESS UNIT RELEASE DATE
CONSUMER ENERGY SERVICE GROUP
- - Majority (except below - 12/31/94
- - Gas Utilization Job Family - 3/31/95
NUCLEAR
- - Majority (except below) - 12/31/94
- - Limerick (other than below) - 12/31/94
- Operations 6/30/95
- Mtce/I&C 6/30/95
- - Station Support (other than below) - 12/31/94
- Mtce/I&C 6/30/95
- - Peach Bottom (other than below - 12/31/94
- Operations 12/31/95
- Mtce/I&C 12/31/95
POWER GENERATION GROUP
- - Majority (except below) - 12/31/94
- - Operations - Cromby Station - 6/30/95
CENTRAL
- - Information Systems - 10/31/94
- - Human Resources- - 12/31/94
Benefits Division 6/30/95
- - Corp. & Public Affairs - 12/31/94
- - Quality Management - 12/31/94
- - Finance - 12/31/94
- - Legal - 12/31/94
- - Support Services - 12/31/94
- - Gas "Meter Shop" - 12/31/94
- - Gas - 6/30/95
- - Bulk - 6/30/95
34
(b) A Participant's Voluntary Early Retirement Election shall
become irrevocable if it is not withdrawn by the Participant, in writing
in a form acceptable to the Plan Administrator:
(1) within seven (7) days following the date such
Voluntary Early Retirement Election is submitted to the Administrator by
the Participant, in the case of Elections submitted to the Administrator
before September 2, 1994; or
(2) within seven (7) days following the date such
Voluntary Early Retirement Election is accepted by the Administrator, in
the case of Elections submitted to the Administrator on or after September
2, 1994.
4C.3 Benefits. Notwithstanding anything to the contrary contained in
the Plan, each Participant who satisfies the requirements of Section 4C.1 shall
be entitled to retire on the following terms:
(a) (1) Notwithstanding the provisions of Section 3.1 (other
than the last sentence of Section 3.1(b)), each Participant who satisfies
the requirements of Section 4C.1 shall have an Accrued Benefit equal to
one-twelfth of the greater of:
(A) the sum of (I) 2% of his average annual
Compensation during the period of his service, if any, between January 1,
1930 and December 31, 1938, inclusive, multiplied by his Benefit Years
before January 1, 1939, and (II) 2% of his aggregate Compensation for
employment after December 31, 1938, or
(B) the sum of (I) a percentage of his average
annual base salary during his 60 consecutive months of employment with the
Company that yield the highest twelve month average equal to 5%, plus 1.2%
multiplied by the sum of three plus his number of Benefit Years determined
as of his Separation from Service (to a maximum of 43 Benefit Years), and
(II) 0.35% of such highest average annual base salary in excess of Covered
Compensation as of the date of reference, multiplied by his Benefit Years
(up to a maximum of 14%);
(2) Notwithstanding the above:
(A) the Accrued Benefit of a Participant who
satisfies the requirements of Section 4C.1 shall not exceed the maximum
amount permissible under Section 415 of the Code. For purposes of this
limitation, the following actuarial assumptions shall be used to determine
the adjusted limitation under Section 415(b)(1) of the Code for
Participants whose benefit payments commence prior to Age 62: (I) 5%
interest; and (II) the 1971 Forecast Mortality Table with a one-year age
rating.
(B) Plan benefits provided under this Article IVC
for Participants described in Section 4C.1 who are Highly Compensated
Employees at any time after 1993 shall be limited to the extent necessary
to satisfy the nondiscriminatory amount requirements of Section 401(a)(4)
of the Code applying the general test described in Treas. Reg. Section
1.401(a)(4)-3(c) to the portion of the Plan covering Participants
described in Section 4C.1.
35
(3) The Section 401(a)(17) Compensation Limit described
in Section 3.3 of the Plan shall apply for purposes of determining
benefits under Section 4C.3(a)(1) above; provided, however, that a
Participant's Accrued Benefit shall in no event be less than the amount
described in Section 3.2(b).
(b) For purposes of determining the date as of which the
Participant may commence receiving his pension pursuant to Article IV, and
his ability to elect a Contingent Annuity Option pursuant to Section 5.3,
the Participant:
(1) shall be deemed to have completed 10 Vesting Years
for purposes of Article IV and shall be deemed to have completed 14
Benefit Years for purposes of Section 5.3; and
(2) shall be deemed to be his actual Age as of his
Separation from Service plus 5 years.
(c) If the Participant's annuity (including any Contingent
Annuity Option benefit) is paid pursuant to Section 4.3, such annuity
shall be computed without regard to the 4% per year reduction described in
the last sentence of such Section.
4C.4 Special Rules. Notwithstanding anything to the contrary
contained in the Plan, if, at the time of making a Voluntary Early Retirement
Election under Section 4C.2, a Participant elects any Contingent Annuity Option,
the election of such option shall become effective immediately.
ARTICLE IVD. 1998 Workforce Reduction Program.
4D.1 Purpose. This Article IVD is intended to provide certain Active
Participants with additional benefits in recognition of the Company's need to
reduce its workforce to address the competitive business conditions facing the
Company and the Affiliates. In general, this Article IVD provides additional
retirement benefits to Active Participants whose Employment with the Company
terminates between June 1, 1998 and June 30, 2000, inclusive, because they have
been declared "excess" by the Company.
4D.2 Definitions. The following capitalized terms, when used in this
Article IVD, shall have the following meanings, notwithstanding any different
definitions of such terms elsewhere in the Plan.
(a) "CTAC Employee" means an Active Participant employed by
the Company in a craft, technical, administrative or clerical position.
(b) "Disabled Employee" means an Active Participant who is
receiving benefits pursuant to the Company's Disabilitant Plan or Long
Term Disabilitant Plan during the period from August 1, 1998, through June
30, 2000, inclusive.
(c) "Election Period" means the 14-day period beginning on the
date an Eligible Participant receives a Program enrollment package.
36
(d) "Eligible Participant" means each PSM Employee, CTAC
Employee or Disabled Employee who satisfies the following applicable
requirements:
(1) In the case of a Disabled Employee, he is described
in Schedule 1 to the Plan and terminates Employment on his Qualified
Retirement Date or Qualified Separation Date, whichever is applicable,
pursuant to his irrevocable written election to participate in the
Program, which election shall be made in the form and manner provided by
the Company and during the applicable Election Period.
(2) In the case of a PSM Employee or a CTAC Employee, he
continues in Employment with the Company (or an Affiliate) in the same
position (unless transferred at the direction of the Company) until, but
not beyond, his Qualified Retirement Date or Qualified Separation Date, if
any, whichever applies; provided, however, that this requirement shall not
apply in the event the PSM Employee or CTAC Employee ceases active
employment with the Company (or an Affiliate) earlier due to a
Disabilitant on account of illness or accident for which such Employee is
eligible for and receives Disabilitant benefits under a Disabilitant
benefit plan sponsored by the Company.
(3) In the case of a PSM Employee, he satisfies both (A)
and (B), below:
(A) He is declared "excess" by the Company based
on the following criteria:
(i) his 1997 job performance; or
(ii) the elimination of his position or a
position in his job classification; or
(iii) failure to be selected for an
available position.
(B) He does not reject an offer from the Company
or an Affiliate to work in a position that is within two salary grades of
his current position.
A description of the PSM Employees who are declared "excess" by the Company in
accordance with the foregoing criteria is set forth on Schedule 1 to the Plan.
(4) In the case of a CTAC Employee, he satisfies both
(A) and (B), below:
(A) He is declared "excess" by the Company based
on the following criteria:
(i) his 1997 job performance; or
37
(ii) the elimination of one or more
positions in his job classification, and
(I) if there are multiple positions
that are identified as excess in his job classification and the number of
such CTAC Employees who elect to participate in the Program exceeds the
number identified as excess, his seniority; or
(II) if there are multiple positions
that are identified as excess in his job classification and the number of
such CTAC Employees who elect to participate in the Program is less than
the number identified as excess, the criteria described in the Company's
suspended Reduction in Force Policy.
A description of the CTAC Employees who are
declared "excess" by the Company in accordance with the foregoing criteria
is set forth on Schedule 1 to the Plan.
(B) In the case of a CTAC Employee described in
subclause (iv)(A)(ii) above, either:
(i) he elects in writing, in the form and
manner provided by the Company and during the applicable Election Period,
to participate in the Program and does not revoke such election within the
time period prescribed by the Company; or
(ii) he irrevocably elects in writing not
to participate in the Program and the Company subsequently terminates his
Employment because he is declared "excess" in accordance with the criteria
set forth in paragraph (4)(A) above;
(5) His Employment, if any, is not terminated prior to
his Qualified Retirement Date or Qualified Separation Date, if any,
because of unsatisfactory job performance or one or more violations of the
Company's Disciplinary Guidelines or Code of Conduct.
(6) He executes a written release and waiver of claims
in favor of the Company and the Affiliates in a form provided by the
Company and within the time period required by the Company. Such release
and waiver of claims shall become irrevocable if it is not withdrawn, in
writing in a form acceptable to the Plan Administrator, within seven (7)
calendar days following its submission to the Plan Administrator.
(7) His Employment, or his Employer's status as an
Affiliate, is not terminated as a result of a sale of assets or stock, a
merger or any other business transaction which provides him an opportunity
to be employed by an employer that is not the Company or an Affiliate.
38
(e) "Program" refers to the enhanced benefits provided
pursuant to this Article IVD.
(f) "PSM Employee" means an Active Participant employed by the
Company in a professional, supervisory or managerial position.
(g) "Qualified Retirement Date" means the date between June 1,
1998 and June 30, 2000, inclusive, as set forth on Schedule 1 of the Plan,
that a Retirement-Eligible Participant may retire from the Company and
receive Retirement Benefits.
(h) "Qualified Separation Date" means the date between June 1,
1998 and June 30, 2000, inclusive, as set forth on Schedule 1 of the Plan,
that a Separation-Eligible Participant may terminate his Employment and
receive Separation Benefits.
(i) "Retirement Benefits" means the benefits described in
Section 4D.4.
(j) "Retirement-Eligible Participant" means an Eligible
Participant who, as of December 31, 1999:
(1) is Age 50 or older; and
(2) is credited with at least five (5) Vesting Years.
For purposes of this paragraph (j), the Age of an Eligible Participant shall be
his actual Age (without regard to the provisions of Section 4D.4).
(k) "SEP Annuity" means an annuity that is the Actuarial
Equivalent of the SEP Lump Sum, determined on the basis of the actuarial
assumptions applicable under Section 5.6 of the Plan.
(l) "SEP Lump Sum" means a fixed dollar amount equal to the
following:
(1) in the case of a Separation-Eligible Participant who
has not received payment for the 90-day search period under the Company's
Reduction in Force Policy prior to the suspension of that policy, a lump
sum equal to the total amount such Separation-Eligible Participant would
have received during the 90-day search period under the Company's
suspended Reduction in Force Policy if such policy had remained in effect;
and
(2) (A) for a Separation-Eligible Participant who has
fewer than ten (10) Benefit Years, two (2) multiplied by the number of
full or partial Benefit Years as of his Separation from Service,
multiplied by his Weekly Base Pay; or
(B) for a Separation-Eligible Participant who has
ten (10) or more Benefit Years, three (3) multiplied by the number of full
or partial Benefit Years as of his Separation from Service multiplied by
his Weekly Base Pay.
39
Notwithstanding the foregoing, no Separation-Eligible
Participant shall be entitled to receive a SEP Lump Sum under clause
(2)(A) above that is less than eight (8) multiplied by his Weekly Base
Pay.
(m) "Separation Benefits" means the benefits described in
Section 4D.5.
(n) "Separation-Eligible Participant" means an Eligible
Participant who:
(1) is not a Retirement-Eligible Participant; or
(2) is a Retirement-Eligible Participant who, in
accordance with Section 4D.3, elects to receive Separation Benefits.
(o) "Weekly Base Pay" means:
(1) in the case of an Eligible Participant who was
compensated on a salaried basis as of May 26, 1998, the Eligible
Participant's weekly base salary as of May 26, 1998, adjusted for any
subsequent merit increases (or for a pro rata portion of such merit
increases if such increases are based on a greater regularly scheduled
workweek than the Eligible Participant's regularly scheduled workweek as
of May 26, 1998);
(2) in the case of an Eligible Participant who was
compensated on a non-salaried basis as of May 26, 1998, the number of
hours per week such Eligible Participant was regularly scheduled to work
as of May 26, 1998 multiplied by his regular hourly rate in effect on the
day
4D.3 Elections of the Retirement and Separation Benefits. Any
Retirement-Eligible Participant shall be entitled to elect to receive Retirement
Benefits or Separation Benefits, but not both. A Retirement-Eligible Participant
must submit to the Company's Human Resources Department a completed and signed
election form, in such form and manner and at such time as may be required by
the Administrator.
4D.4 Computation of Retirement Benefits Under the Program.
(a) Each Retirement-Eligible Participant who has not elected
Separation Benefits in accordance with Section 4D.3 shall be entitled to
early retirement benefits determined under Section 4.3 of the Plan,
regardless of the number of Vesting Years with which he has been credited;
provided, however, that for the purpose of determining any applicable
reduction in the amount received upon early retirement, such Participant's
Age on his Benefit Commencement Date shall be deemed to be his actual Age
on such date plus 60 additional months.
(b) The Accrued Benefit of a Retirement-Eligible Participant
who satisfies the requirements of an Eligible Participant, other than
paragraphs 4D.2(d)(2) and 4D.2(d)(6), and who dies before his Qualified
Retirement Date, shall be calculated by
40
applying paragraph 4D.4(a) as of the date of his death for purposes of
determining any death benefit payable on behalf of such Participant
pursuant to Sections 5.3 or 5.4, notwithstanding his failure to satisfy
paragraphs 4D.2(d)(2) and/or 4D.2(d)(6).
4D.5 Computation, Payment and Form of Separation Benefits Under the
Program.
(a) Each Separation-Eligible Participant shall be entitled to
receive a SEP Annuity in addition to his Accrued Benefit.
(b) A Separation-Eligible Participant shall receive payment of
his SEP Annuity in accordance with the following:
(1) A Separation-Eligible Participant shall receive the
sum of (I) the Actuarial Equivalent of his SEP Annuity in the form of a
Single Life Annuity commencing on his Normal Retirement Date (determined
on the basis of the actuarial assumptions applicable under Appendix A of
the Plan) and (II) his Accrued Benefit, with such sum payable at such
time, in such form and subject to such adjustments as may otherwise be
applicable under Articles IV and V of the Plan. In lieu of receiving such
Actuarial Equivalent of his SEP Annuity at such time and in such form as
he receives his Accrued Benefit, a Separation-Eligible Participant may
instead elect to receive immediate payment of his SEP Annuity in
accordance with paragraph (2) below or an immediate distribution of his
SEP Lump Sum in accordance with paragraph (3) below.
(2) A Separation-Eligible Participant may elect, in
accordance with the procedure described in Section 4.3, to receive his SEP
Annuity immediately, with payment to begin as of his Qualified Separation
Date in the following form:
(A) The SEP Annuity of a Separation-Eligible
Participant who is unmarried on his Benefit Commencement Date shall be
paid in the form of a Single Life Annuity.
(B) The SEP Annuity of a Separation-Eligible
Participant who is married on his Benefit Commencement Date shall be paid
in the form of a Qualified Joint and Survivor Annuity.
(3) In lieu of his SEP Annuity, a Separation-Eligible
Participant may elect to receive an immediate payment of his SEP Lump Sum,
with payment to be made as of his Qualified Separation Date in a single
sum. Any such election by a Separation-Eligible Participant who is married
on his Benefit Commencement Date shall be subject to the spousal consent
requirements described in Section 5.7, shall be made in writing in a
manner prescribed by the Company and may be made or revoked at any time
within the 90-day period preceding the Benefit Commencement Date but in no
event earlier than the date on which the Participant receives the notice
described in Section 5.5(a).
(c) In the case of a Separation-Eligible Participant who
satisfies the requirements of an Eligible Participant, other than
paragraphs 4D.2(d)(ii) and
41
4D.2(d)(vi), and who dies before his Qualified Separation Date, the
Actuarial Equivalent of such Participant's SEP Annuity in the form of a
Single Life Annuity commencing on his Normal Retirement Date (determined
on the basis of the actuarial assumptions applicable under Appendix A of
the Plan) shall be added to his Accrued Benefit for the purpose of
determining any death benefit payable on behalf of such Participant
pursuant to Sections 5.3 or 5.4, notwithstanding his failure to satisfy
paragraphs 4D.2(d)(ii) and/or 4D.2(d)(vi).
ARTICLE IVE. Merger Separation Program
4E.1 Purpose. This Article IVE is intended to provide certain
Participants with additional benefits in recognition of the Company's need to
reduce its workforce in connection with the merger of the Company and Unicom
Corporation. In general, this Article IVE provides additional retirement
benefits to certain Participants whose Employment with the Company terminates
between 60 days after the Merger Date and December 31, 2002, inclusive.
4E.2 Definitions. The following capitalized terms, when used in this
Article IVE, shall have the following meanings, notwithstanding any different
definitions of such terms elsewhere in the Plan.
(a) "Annuity" means an annuity that is the Actuarial
Equivalent of the Lump Sum, determined on the basis of the actuarial
assumptions applicable under Section 5.6 of the Plan.
(b) "Disabled Employee" means an Active Participant who is
receiving benefits pursuant to the Company's Disabilitant Plan or Long
Term Disabilitant Plan at any time during the Merger Separation Period.
(c) "Election Period" means the 45-day period beginning on the
date an Eligible Participant receives a Program enrollment package.
(d) "Eligible Participant" means each Participant, other than
an intermittent employee, who satisfies the following applicable
requirements:
(1) In the case of a Disabled Employee, he terminates
Employment on his Qualified Retirement Date or Qualified Separation Date,
whichever applies, pursuant to his irrevocable written election to
participate in the Program, which election shall be made in the form and
manner provided by the Company and during the applicable Election Period.
(2) In the case of a Participant other than a Disabled
Employee or a Participant described in (3) below, he satisfies (A) or (B),
and each of(C) and (D), below:
(A) His current position is eliminated as part of
the restructuring program related to the merger between the Company and
Unicom Corporation; or
42
(B) He is offered a position or a transfer
(either between or within business units) as part of the merger between
the Company and Unicom Corporation that results in one or more of the
following:
(i) an increase in one-way commuting
distance of more than 50 miles;
(ii) a substantial change in major position
responsibilities and duties, as determined by the Company acting as
employer and not as a fiduciary;
(iii) a lower job band; or
(iv) a lower annual base salary.
(C) His position is identified by the Company for
elimination, transfer or change, whichever applies, he is notified of such
elimination, transfer or change no later than sixty days before December
31, 2002 and, in the case of a transfer described in paragraph (2)(B)
above, he elects in writing, in the form and manner provided by the
Company and during the Election Period, to participate in the Program.
(D) He continues in Employment with the Company
or an Affiliate in the same position (unless transferred at the direction
of the Company) until, but not beyond, his Qualified Retirement Date or
Qualified Separation Date, if any, whichever applies; provided, however,
that this requirement shall not apply in the event the Participant ceases
active employment with the Company or an Affiliate earlier due to a
disability on account of illness or accident which such Employee is
eligible and receives disability benefits under a disability benefit plan
sponsored by the Company.
(3) In the case of an Active Participant who is a
nonexempt, hourly craft employee, one or more positions in his job
classification are eliminated as part of the restructuring program related
to the merger between the Company and Unicom Corporation, and
(A) if there are multiple such positions that are
eliminated in his job classification and the number of such Active
Participants who elect to participate in the Program exceeds the number of
positions eliminated, Eligible Participants will be identified based on
seniority; or
(B) if there are multiple such positions that arc
eliminated in his job classification and the number of such Active
Participants who elect to participate in the Program is less than the
number of positions eliminated, Eligible Participants will be identified
based on the criteria described in the Company's suspended Reduction in
Force Policy.
(4) His Employment, if any, is not terminated prior to
his Qualified Retirement Date or Qualified Separation Date, whichever
applies, for any reason not related to the merger between the Company and
Unicom Corporation.
43
(5) He executes a written release and waiver of claims
in favor of the Company and the Affiliates in a form provided by the
Company and within the time period required by the Company. Such release
and waiver of claims shall become irrevocable if it is not withdrawn, in
writing in a form acceptable to the Plan Administrator, within seven (7)
calendar days following its submission to the Plan Administrator.
(e) "Enhanced Age" means:
(1) in the case of a Retirement-Eligible Participant,
his actual Age plus twelve (12) additional months; and
(2) in the case of a Separation-Eligible Participant,
his actual Age plus the number of months included in his Special Payment
Period.
(f) "Enhanced Benefit Years" means:
(1) in the case of a Retirement-Eligible Participant,
his actual Benefit Years (up to a maximum of 40) plus twelve (12)
additional months; and
(2) in the case of a Separation-Eligible Participant,
his actual Benefit Years (up to a maximum of 40) plus the number of months
equal to one-fourth of the number of weeks included in Section 4E.2(r)(2)
(up to a maximum of twenty-four (24) weeks), rounded to the nearest whole
number of months (with remainders of one-half(l/2) rounded to the next
higher whole number).
(g) "Enhanced Vesting Years" means:
(1) in the case of a Retirement-Eligible Participant,
his actual Vesting Years plus twelve (12) additional months; and
(2) in the case of a Separation-Eligible Participant,
his actual Vesting Years plus the number of months equal to one-fourth of
the number of weeks included in Section 4E.2(r)(2) (up to a maximum of
twenty-four (24) weeks), rounded to the nearest whole number of months
(with remainders of one-half (1/2) rounded to the next higher whole
number).
(h) "Lump Sum" means a fixed dollar amount equal to the
following:
(1) in the case of a Retirement-Eligible Participant, 26
multiplied by his Weekly Base Pay; and
(2) in the case of a Separation-Eligible Participant,
the sum of (A) and (B) below:
(A) 52 multiplied by his Weekly Base Pay; and
44
(B) the number of full Vesting Years as of his
Qualified Separation Date that are in excess often (10) but not in excess
of thirty-six (36), if any, multiplied by his Weekly Base Pay.
(i) "Merger Separation Period" means the time period beginning
sixty (60) days before the Merger Date and ending on December 31, 2002,
inclusive.
(j) "Program" refers to the enhanced benefits provided
pursuant to this Article IVE.
(k) "Qualified Retirement Date" means the date during the
Merger Separation Period. as determined by the Company, that a
Retirement-Eligible Participant may retire from the Company and receive
Retirement Benefits.
(l) "Qualified Separation Date" means the date during the
Merger Separation Period, as determined by the Company, that a
Separation-Eligible Participant may terminate his Employment and receive
Separation Benefits.
(m) "Retirement Benefits" means the benefits described in
Section 4E.4.
(n) "Retirement-Eligible Participant" means an Eligible
Participant who:
(1) is at least Age 50 with five (5) or more Vesting
Years as of his Qualified Retirement Date; or
(2) satisfies the requirements of paragraph (1) above
after taking into account his Enhanced Age and/or his Enhanced Vesting
Years.
(o) "Separation Benefits" means the benefits described in
Section 4E.5.
(p) "Separation-Eligible Participant" means an Eligible
Participant who:
(1) is not a Retirement-Eligible Participant; or
(2) is a Retirement-Eligible Participant who, in
accordance with Section 4E.3, elects to receive Separation Benefits.
(q) "Special Payment Period" means, for a Separation-Eligible
Participant, the sum of (1) and (2) below:
(1) twelve (12) months; and
(2) one (1) week for each full Vesting Year as of his
Qualified Separation Date in excess often (10) but not in excess of
thirty-six (36), if any.
45
(r) "Weekly Base Pay" means:
(1) in the case of an Eligible Participant who was
compensated on a salaried basis as of the later of his Employment Date or
August 1, 2000, the Eligible Participant's weekly base salary as of such
date, adjusted for any subsequent merit increases (or for a pro rata
portion of such merit increases if such increases are based on a greater
regularly scheduled workweek than the Eligible Participant's regularly
scheduled workweek as of the later of his Employment Date or August 1,
2000);
(2) in the case of an Eligible Participant who was
compensated on a non-salaried basis as of the later of his Employment Date
or August 1, 2000, the number of hours per week such Eligible Participant
was regularly scheduled to work as of such date multiplied by his regular
hourly rate in effect on the day before his Separation from Service, and
(3) in the case of a Disabled Participant, the amount
calculated in accordance with (1) or (2) above, whichever applies,
determined as of the last day the Participant performed services for the
Company immediately prior to the occurrence of his disability.
4E.3 Elections of the Retirement and Separation Benefits. Any
Retirement-Eligible Participant shall be entitled to elect to receive Retirement
Benefits or Separation Benefits, but not both. A Retirement-Eligible Participant
must submit to the Company's Human Resources Department a completed and signed
election form, in such form and manner and at such time as may be required by
the Administrator.
4E.4 Computation of Retirement Benefits Under the Program.
(a) Each Retirement-Eligible Participant who has not elected
Separation Benefits in accordance with Section 4E.3 shall be entitled to
early retirement benefits regardless of the number of Vesting Years with
which he has been credited. Such early retirement benefits shall be
determined under Section 4.3; provided, however, that for purposes of
calculating such Retirement-Eligible Participant's Accrued Benefit and
determining any applicable reduction in the amount received upon early
retirement: (1) such Participant's Age on his Benefit Commencement Date
shall be deemed to be his Enhanced Age, (2) such Participant's Benefit
Years on his Benefit Commencement Date shall he deemed to he his Enhanced
Benefit Years for purposes of Section 3.1(b), (3) such Participant's
aggregate Compensation for purposes of Section 3.l(a)(2) shall he deemed
to include an additional amount equal to his annual Compensation for the
calendar year ending on or immediately preceding his Qualified Retirement
Date, and (4) such Participant's early retirement benefits shall be
determined using the early retirement reduction factors set forth on
Schedule A. The Benefit Commencement Date of a Retirement-Eligible
Participant shall not bc earlier than the date he attains Age 50,
determined without regard to his Enhanced Age.
(b) The Accrued Benefit of a Retirement-Eligible Participant
who has not elected Separation Benefits, who satisfies the requirements of
an Eligible Participant,
46
other than paragraphs 4E.2(d)(2)(D) and 4E.2(d)(5), and who dies before
his Qualified Retirement Date shall be calculated by applying paragraph
4E.4(a) as of the date of his death for purposes of determining any death
benefit payable on behalf of such Participant pursuant to Sections 5.3 or
5.4, notwithstanding his failure to satisfy paragraphs 4E.2(d)(2)(D)
and/or 4E.2(d)(5).
(c) Each Retirement-Eligible Participant who has not elected
Separation Benefits and who is not employed by the Company under a change
in control agreement shall be entitled to receive an Annuity in addition
to his Accrued Benefit, which Annuity shall be paid in accordance with
Section 4E.6.
4E.5 Computation of Separation Benefits Under the Program
(a) Each Separation-Eligible Participant shall be entitled to
pension benefits determined in accordance with the terms of the Plan;
provided, however, that for purposes of calculating such
Separation-Eligible Participant's Accrued Benefit: (1) such Participant's
Age on his Benefit Commencement Date shall be deemed to be his Enhanced
Age, (2) such Participant's Benefit Years on his Benefit Commencement Date
shall be deemed to be his Enhanced Benefit Years for purposes of Section
3.1(b), and (3) such Participant's aggregate Compensation for purposes of
Section 3.l(a)(2) shall be deemed to include an additional amount equal to
the product of (i) one-twelfth (1/12) of his annual Compensation for the
calendar year ending on or immediately preceding his Qualified Separation
Date and (ii) the difference between the number of months included in his
Enhanced Benefit Years and the number of months included in his actual
Benefit Years (up to a maximum of 480).
For purposes of determining any reduction in the amount received by a
Separation-Eligible Participant, if the Separation-Eligible Participant's
Enhanced Age as of his Qualified Separation Date is at least 45, he is
credited with at least ten (10) Enhanced Vesting Years as of his Qualified
Separation Date and his Benefit Commencement Date occurs on or after the
date he attains Age 50, determined without regard to his Enhanced Age,
such Participant's pension benefits shall be determined using the enhanced
vested pension factors set forth on Schedule B.
(b) The Accrued Benefit of a Separation-Eligible Participant
who satisfies the requirements of an Eligible Participant, other than
paragraphs 4E.2(d)(2)(D)and 4E.2(d)(5), and who dies before his Qualified
Separation Date shall be calculated by applying paragraph 4E.5(a) as of
the date of his death for purposes of determining any death benefit
payable on behalf of such Participant pursuant to Sections 5.3 or 5.4,
notwithstanding his failure to satisfy paragraphs 4E.2(d)(2)(D) and/or
4E.2(d)(5).
(c) Each Separation-Eligible Participant who is not employed
by the Company under a change in control agreement shall be entitled to
receive an Annuity in addition to his Accrued Benefit, which Annuity shall
be paid in accordance with Section 4E.6.
47
4E.6 Payment and Form of Annuities Under the Program.
(a) Each Eligible Participant described in Sections 4E.4(c)
and 4E.5(c) shall receive the sum of (l) the Actuarial Equivalent of his
Annuity in the form of a Single Life Annuity commencing on his Normal
Retirement Date (determined on the basis of the actuarial assumptions
applicable under Appendix A of the Plan) and (2) his Accrued Benefit, with
such sum payable at such time, in such form and subject to such
adjustments as may otherwise be applicable under Articles IV, IVE and V of
the Plan. In. lieu of receiving such Actuarial Equivalent of his Annuity
at such time and in such form as he receives his Accrued Benefits, such
Eligible Participant may instead elect to receive immediate payment of his
Annuity in accordance with paragraph (b) below or an immediate
distribution of his Lump Sum in accordance with paragraph (c) below.
(b) An Eligible Participant may elect) in accordance with the
procedure described in Section 4.3, to receive his Annuity immediately,
with payment to begin as of his Qualified Retirement Date or his Qualified
Separation Date, whichever applies, in the following form:
(1) The Annuity of an Eligible Participant who is
unmarried on his Benefit Commencement Date shall be paid in the form of a
Single Life Annuity.
(2) The Annuity of an Eligible Participant who is
married on his Benefit Commencement Date shall be paid in the form of a
Qualified Joint and Survivor Annuity.
(3) In lieu of payment in the form described in (1)
above, an Eligible Participant who is unmarried on his Benefit
Commencement Date may elect to receive an immediate payment of his Annuity
in the form of a contingent annuity, with 50% of the annuity payable upon
his death to a contingent beneficiary designated by him. The annuity
described in the preceding sentence will be actuarially reduced using the
factors described in Appendix A to reflect the payments which may become
payable to the beneficiary.
(4) In lieu of payment in the form described in (2)
above, an Eligible Participant who is married on his Benefit Commencement
Date may elect to receive an immediate payment of his Annuity in the form
of a Single Life Annuity.
(c) In lieu of his Annuity, an Eligible Participant may elect
to receive an immediate payment of his Lump Sum, with payment to be made
as of his Qualified Separation Date or Qualified Retirement Date,
whichever applies, in a single sum.
(d) Any election pursuant to paragraph (b)(3),(b)(4) or (c)
above by an Eligible Participant shall be made in writing in a manner
prescribed by the Company and may be made or revoked at any time within
the 90-day period preceding the Benefit Commencement Date but in no event
earlier than the date on which the Participant receives the notice
described in Section 5.5(a) and, in the case of an Eligible Participant
who is married on his Benefit Commencement Date, shall be subject to the
spousal consent requirements described in Section 5.7.
48
(e) In the case of an individual who satisfies the
requirements of an Eligible Participant, other than paragraphs
4E.2(d)(2)(D) and 4E.2(d)(5), and who dies before his Qualified Separation
Date or Qualified Retirement Date, whichever applies, the Actuarial
Equivalent of such Participant's Annuity in the form of a Single Life
Annuity commencing on his Normal Retirement Date (determined on the basis
of the actuarial assumptions applicable under Appendix A of the Plan)
shall be added to his Accrued Benefit for the purpose of determining any
death benefit payable on behalf of such Participant pursuant to Sections
5.3 and 5.4, notwithstanding his failure to satisfy paragraphs
4E.2(d)(2j(D) and/or 4E.2(d)(5).
ARTICLE V. Form of Pensions.
5.1 Unmarried Participants. The monthly annuity of a Participant who
is unmarried on his Benefit Commencement Date shall be paid as a Single Life
Annuity unless he elects an optional form of benefit under Section 5.3 or
receives a lump sum distribution under Section 5.6.
5.2 Married Participants.
(a) The monthly annuity of a Participant who is married on his
Benefit Commencement Date, shall be paid as a Qualified Joint and Survivor
Annuity, unless he elects an optional form of benefit under Paragraph (b)
or Section 5.3 or receives a lump sum distribution under Section 5.6.
(b) A Participant described in Paragraph (a) may elect to
waive the Qualified Joint and Survivor Annuity and receive his annuity in
the form of a Single Life Annuity. Any such election shall be subject to
the spousal consent requirements described in Section 5.7, shall be made
in writing in a manner prescribed by the Company and may be made or
revoked at any time within the 90 day period preceding the Benefit
Commencement Date elected by the Participant but in no event earlier than
the date on which the Participant receives the notice described in Section
5.5(a).
5.3 Contingent Annuity Option.
(a) An Active Participant (including a Participant who is
treated as an Active Participant for purposes of Section 4.3 and this
Section 5.3, but not for any other provision of the Plan) who has at least
14 Benefit Years, or who has attained Age 65 and has at least 5 Benefit
Years, or a Participant (including a Participant who continues to be
treated as an Active Participant for purposes of Section 4.3 and Section
5.3, but not for any other provision of the Plan) who had a Separation
from Service after becoming eligible for early retirement under Section
4.3 (hereinafter referred to as an "Eligible Participant"), may elect, in
writing on a form prescribed by the Administrator, a Contingent Annuity
Option under which he may designate a percentage of his annuity to be paid
upon his death to a contingent beneficiary designated by him. The
percentage so designated shall be 25%, 50%, 75% or 100%, as the
Participant elects, and may be changed by an Eligible Participant at any
time prior to the later of the Participant's Normal Retirement Date or
Separation from Service. The annuity otherwise payable to a
49
Participant electing a Contingent Annuity Option or to his contingent
beneficiary will be actuarially reduced using the factors described in
Appendix A to reflect the payments which may become payable to the
beneficiary. Notwithstanding the above, if the Eligible Participant's
spouse is designated as contingent beneficiary, the actuarial reduction
will not reflect the cost of a joint and survivor annuity option providing
a survivor annuity to the Participant's spouse of (1) 50% of the amount
payable to the Participant, if a 50%, 75% or 100% contingent annuity
option is elected, or (2) 25% of the amount payable to the Participant, if
a 25% contingent annuity option is elected; provided, however, that the
subsidy described in this sentence shall not apply to a former spouse who
is to be treated as a Participant's spouse pursuant to a qualified
domestic relations order, unless the qualified domestic relations order
specifically provides that such subsidy applies to the former spouse. If
the contingent beneficiary is other than the spouse, the percentage
payable to the contingent beneficiary after the Participant's death may
not exceed the applicable percentage from Appendix B. The Contingent
Annuity Option of an electing Participant who has a Separation from
Service and is not eligible for early retirement under Section 4.3 shall
be canceled.
(b) (1) An Eligible Participant's election or change in
election under Paragraph (a) shall become effective on the first of the
month next following the date such election or change is properly filed
with the Administrator.
(2) An Eligible Participant's election under Paragraph
(a) shall not be valid upon a Participant's Benefit Commencement Date if
such election is not confirmed in writing by such Participant, with
spousal consent as described in Section 5.7, within the 90 day period
preceding the Benefit Commencement Date, and in no event earlier than the
date on which the Participant receives the notice described in Section
5.5(a). If an Eligible Participant has made no election under Paragraph
(a), or has made an invalid election, as of his Benefit Commencement Date,
such Participant's pension shall be paid as described in Section 5.1 or
5.2, whichever applies.
(3) (A) The election under Paragraph (a) in effect for
an Eligible Participant who is married on the date of his death shall not
be valid upon the Participant's death unless (i) the spousal consent
requirements of Section 5.7 are satisfied; (ii) if the Participant's death
occurs after the first day of the Plan Year in which the Participant
attains Age 35, the Participant's election was made or confirmed in
writing (with the applicable spousal consent) on or after the first day of
such Plan Year, and (iii) in the event that the election in effect under
Paragraph (a) does not provide for a survivor benefit to the Participant's
surviving spouse, the Participant has made no change to his election under
Paragraph (a) that has not yet taken effect which would result in a
survivor benefit payable to his spouse. If an Eligible Participant who is
married at the time of his death has made no election, or has made an
invalid election, the Participant's surviving spouse shall receive the
benefit described in Section 5.4. No benefit shall be payable to any other
contingent beneficiary or to the Participant's estate.
(B) If an Eligible Participant is unmarried at
the time of
50
his death and has failed to make a valid election or is not survived by a
contingent beneficiary, no benefit shall be paid under this Section.
(c) Except as provided in Paragraph (b):
(1) If an electing Participant who has had a Separation
from Service whose Contingent Annuity Option has not been canceled dies on
or after the effective date of the option, his contingent beneficiary, if
surviving, will receive an annuity for life beginning as of the first day
of the second month following his death and based upon the designated
percentage of the annuity which the Participant was receiving or to which
he would have been entitled; provided, however, that, if the contingent
beneficiary is the Participant's surviving spouse and the designated
percentage is at least 50%, payment to the spouse shall not begin prior to
what would have been the Participant's Normal Retirement Date without the
spouse's written consent made within the 90-day period preceding the
Benefit Commencement Date.
(2) If an electing Active Participant dies on or after
the effective date of the option, his contingent beneficiary, if living,
shall receive an annuity, for life, beginning as of the first day of the
second month following the month in which the Participant's death occurs,
based upon the designated percentage of the benefit to which the
Participant would have been immediately entitled if he had retired on the
date of his death; provided, however, that, if the contingent beneficiary
is the Participant's surviving spouse and the designated percentage is at
least 50%, payment to the spouse shall not begin prior to what would have
been the Participant's Normal Retirement Date without the spouse's written
consent made within the 90-day period preceding the Benefit Commencement
Date. For purposes of this Subparagraph only, the annuity to which a
Participant would have been entitled shall be his Accrued Benefit reduced
in accordance with Section 4.3 and, if applicable, reduced further by 4%
per year (to the nearest one-twelfth year) for any period by which his age
at the time of his death is less than 50.
(d) (1) If the contingent beneficiary dies after the effective
date of the option and after the later of the Participant's Normal
Retirement Date or his Separation from Service, the reduced annuity
payable to the Participant will remain in effect.
(2) If the contingent beneficiary dies after the
effective date of the option, but prior to the later of the Participant's
Normal Retirement Date or his Separation from Service, the option shall be
canceled upon receipt of proof of death. If the Participant has not then
reached his Normal Retirement Date or has not had a Separation from
Service, the Participant may elect a subsequent Contingent Annuity Option
effective immediately upon notice to the Company, subject to the
conditions stated herein. If he has reached his Normal Retirement Date and
has had a Separation from Service, the Participant may not make any
further elections.
(e) Subject to the conditions of Paragraph (a), an Eligible
Participant may make or change his election and designate or change a
beneficiary and/or designate a revised benefit percentage at any time
prior to the later of the Participant's Normal
51
Retirement Date or Separation from Service. An Eligible Participant may,
regardless of whether he has previously made a different election under
this Section 5.3, elect in writing to receive his annuity in the form
provided in Section 5.1 or 5.2, whichever applies, or in such other form
as is permitted under Paragraph (a), subject to the provisions of Section
5.7. The Participant may make such an election at any time before the
Benefit Commencement Date but such an election may not be revoked after
the Benefit Commencement Date, except as provided in Paragraph (d)(2).
Notwithstanding the foregoing, effective July 15, 1990, a Participant who
has not reached his Normal Retirement Date and who elects a form of
benefit under this Section 5.3 may waive any right to change his election
in the future and irrevocably elect a specific Contingent Annuity Option
as of his Benefit Commencement Date.
(f) Commencing with payments due September 1, 1986, the
minimum monthly annuity to which a designated beneficiary under a
Contingent Annuity Option described in this Section 5.3 shall be entitled
is $150.
5.4 Death Benefits for Other Vested Participants.
(a) Eligibility. A death benefit shall be payable under this
Section 5.4 with respect to a Participant who dies prior to his Benefit
Commencement Date if on the date of his death he is married and:
(1) he does not meet the requirements for the Contingent
Annuity Option described in Section 5.3, and
(A) he is an Employee who has met the
requirements for early or normal retirement under the Plan; or
(B) he is a former Employee who has had a
Separation from Service after meeting the requirements of Section 4.3; or
(C) he has been married for at least one year to
the same spouse and has at least five Vesting Years to his credit, or
(2) he does meet the requirements described in Section
5.3 but has made no election, or has made an invalid election, under that
Section.
(b) Amount of Benefit. Upon the death of a Participant
described in Section 5.4(a), the Participant's surviving spouse, if living
on the date set forth in Subparagraph (1)-(4) of this Section, whichever
shall apply, shall receive a pension in accordance with the following
rules:
(1) If the Participant is an Employee who has met the
requirements for retirement under Sections 4.1-4.3, the pension to the
surviving spouse shall begin, as elected in writing by the spouse not more
than 90 days prior to the spouse's Benefit Commencement Date, on the first
day of the month following the month in which the Participant's death
occurs or the first day of any month thereafter, shall end with the
payment on the first day of the month in which the spouse's death occurs,
and
52
shall be in a monthly amount equal to the amount the spouse would have
received if the Participant had a Separation from Service on the date of
his death, had survived and retired on the Benefit Commencement Date
elected by the spouse and had elected an immediate pension in the form of
a Qualified Joint and Survivor Annuity; provided, however, that (A) the
spouse's Benefit Commencement Date shall not be later than the later of
(i) the Participant's Normal Retirement Date or (ii) the first day of the
month following the month in which the Participant's death occurs and (B)
the benefit payable to the spouse of a Participant described in Section
5.4(a)(2) shall be determined without regard to any otherwise applicable
actuarial reduction reflecting the cost of the Qualified Joint and
Survivor Annuity.
(2) If the Participant is an Employee who has not met
the requirements for retirement under Sections 4.1-4.3, the pension to the
surviving spouse shall begin, as elected in writing by the spouse not more
than 90 days prior to the spouse's Benefit Commencement Date, on the first
day of the month following the month in which the Participant would have
first been eligible to receive his pension under Section 4.4 if he had a
Separation from Service on the date of his death and had not died, or the
first day of any month thereafter, shall end with the payment on the first
day of the month in which the spouse's death occurs, and shall be in a
monthly amount equal to the amount the spouse would have received if the
Participant's Separation from Service had occurred on the day of his death
and he had survived and elected to begin receiving his pension in the form
of a Qualified Joint and Survivor Annuity on the Benefit Commencement Date
elected by the spouse; provided, however, that (A) the spouse's Benefit
Commencement Date shall not be later than what would have been the
Participant's Normal Retirement Date and (B) the benefit payable to the
spouse of a Participant described in Section 5.4(a)(2) shall be determined
without regard to any otherwise applicable actuarial reduction reflecting
the cost of the Qualified Joint and Survivor Annuity.
(3) If the Participant is a former Employee who retired
under Sections 4.1-4.3, the pension to the surviving spouse shall begin,
as elected in writing by the spouse not more than 90 days prior to the
spouse's Benefit Commencement Date, on the first day of the month
following the month in which the Participant's death occurs or the first
day of any month thereafter, shall end with the payment on the first day
of the month in which the spouse's death occurs, and shall be in a monthly
amount equal to the amount the spouse would have received if the
Participant had elected to begin receiving his pension in the form of a
Qualified Joint and Survivor Annuity on the Benefit Commencement Date
elected by the spouse; provided, however, that (A) the spouse's Benefit
Commencement Date shall not be later than the later of (i) the
Participant's Normal Retirement Date or (ii) the first day of the month
following the month in which the Participant's death occurs and (B) the
benefit payable to the spouse of a Participant described in Section
5.4(a)(2) shall be determined without regard to any otherwise applicable
actuarial reduction reflecting the cost of the Qualified Joint and
Survivor Annuity.
(4) If the Participant is a former Employee who did not
meet the requirements for retirement under Sections 4.1-4.3, the pension
to the surviving
53
spouse shall begin, as elected in writing by the spouse not more than 90
days prior to the spouse's Benefit Commencement Date, on the first day of
the month following the month in which the Participant would have first
been eligible to receive his pension under Section 4.4 if he had not died
or the first day of any month thereafter, shall end with the payment on
the first day of the month in which the spouse's death occurs, and shall
be in a monthly amount equal to the amount the spouse would have received
if the Participant elected to begin receiving his actual pension in the
form of a Qualified Joint and Survivor Annuity on the Benefit Commencement
Date elected by the spouse; provided, however, that the spouse's Benefit
Commencement Date shall not be later than what would have been the
Participant's Normal Retirement Date.
5.5 Notice to Participants.
(a) Each Participant shall receive in written nontechnical
language a general description or explanation of (1) the forms of payment
described in Sections 5.1, 5.2 and 5.3, including information explaining
the relative values of each form of payment, (2) the Participant's right
to waive the form of payment described in Section 5.1 or 5.2(a), whichever
applies, and elect an optional form of payment and the financial effect of
such an election on his pension, (3) the rights of the Participant's
spouse, if any, with respect to the waiver and election, (4) the
Participant's right to revoke an election to receive an optional form of
payment and the effect of such revocation, and (5) if the Participant has
not reached his Normal Retirement Date, the Participant's right to defer
commencement of his pension until his Normal Retirement Date. Such
information shall be furnished to the Participant not less than 30 days
and not more than 90 days prior to the Participant's Benefit Commencement
Date, and the time for an election under this Section shall begin no
earlier than the date such information is furnished.
Notwithstanding the foregoing, effective for Plan Years
beginning on or after January 1, 1997, the Participant's Benefit
Commencement Date may precede or may be fewer than 30 days after the
explanation described in this Section is provided if:
(1) the Participant is given notice of his right to a
30-day period in which to consider whether to (i) waive the normal form of
benefit and elect an optional form and (ii) to the extent applicable,
consent to the distribution;
(2) the Participant affirmatively elects a distribution
and a form of benefit and the spouse, if necessary, consents to the form
of the benefit elected;
(3) the Participant is permitted to revoke his
affirmative election at any time prior to his Benefit Commencement Date,
or if later, the expiration of a 7-day period beginning on the day after
the explanation described in this Section is provided to the Participant;
(4) the Benefit Commencement Date is after the date the
Administrative Committee receives written notice of the Participant's
intent to begin receiving benefits; and
54
(5) distribution to the Participant does not commence
before the expiration of the 7-day period described in paragraph (3)
above.
(b) Each Eligible Participant described in Section 5.3(a)
shall receive a written explanation of (1) the terms and conditions of the
pre-retirement survivor annuity described in Section 5.4, (2) the
Participant's right to waive such survivor annuity in favor of the death
benefit under a Contingent Annuity Option and the effect of such waiver,
(3) the rights of the Participant's spouse with respect to such waiver,
and (4) the Participant's right to revoke such waiver and the effect of
such revocation. Such explanation shall be provided when the Participant
first becomes an Eligible Participant described in Section 5.3(a) and, if
the Eligible Participant has not attained Age 32 at the time of the first
notice, again within the three-year period that begins on the first day of
the Plan Year in which the Participant attains Age 32.
5.6 Cash-Outs. Effective on such date as shall be determined by the
Company, if the Actuarial Equivalent single-sum value, determined as of the date
of distribution, of the vested Accrued Benefit of a Participant who has had a
Separation from Service, or of the benefit payable to a spouse or other
beneficiary under Section 5.3 or 5.4 by reason of the Participant's death prior
to his Benefit Commencement Date, is $5,000 or less, the benefit shall be paid,
as soon as administratively practicable following the later of (a) the
Participant's Separation from Service or death, or (b) the effective date of
this Section 5.6, as a single-sum in settlement of all liabilities of the Plan
in connection with the Participant; provided, however, that no such payment
shall be made after such benefit has commenced in any other form.
5.7 Spousal Consent. No Participant's election:
(a) to waive the Qualified Joint and Survivor Annuity in favor
of a form of payment other than a Contingent Annuity Option providing for
payment of at least 50% of the Participant's annuity to his surviving
spouse, or
(b) to waive the death benefit described in Section 5.4 in
favor of the death benefit payable under a form of payment other than a
Contingent Annuity Option described in Paragraph (a), above, shall be
effective with respect to a Participant who is married unless the
Participant's spouse (as of the Benefit Commencement Date or date of
death, whichever applies) consents thereto in writing, and such consent
(1) acknowledges the effect of the election, (2) specifies the designated
beneficiary or consents to such designation and consents prospectively to
any subsequent designation of beneficiary made by the Participant,
acknowledging the spouse's right to limit consent to a specific alternate
beneficiary, (3) specifies the optional form of payment or consents to
such election and consents prospectively to any subsequent choice of
optional form made by the Participant, acknowledging the spouse's right to
limit consent to a specific optional form, and (4) is witnessed by a Plan
representative or by a notary public, or the Administrator finds that the
spouse cannot be located.
5.8 Minimum Distribution Requirements. Notwithstanding anything in
the Plan to the contrary, the form and timing of all distributions under the
Plan to any Participant, including a Participant whose Separation from Service
occurred prior to January 1, 1989, shall be
55
in accordance with Section 401(a)(9) of the Code and regulations issued
thereunder, including the incidental death benefit requirements of Section
401(a)(9)(G) of the Code and Treas. Reg. Section 1.401(a)(9)-2.
5.9 Application for Benefits. Except as provided in Section 5.6 or
in Section 5.3(c) for a non-spouse contingent beneficiary, benefit payments
shall commence when properly written application for same is received by the
Administrator. In the event that a Participant, or the spouse of a deceased
Participant entitled to benefits under the Plan fails to apply to the
Administrator by the earlier of (a) the Participant's Normal Retirement Date or
the date of the Participant's Separation from service, if later, or (b) the end
of the calendar year in which the Participant attains age 70-1/2, the
Administrator shall make diligent efforts to locate such Participant or spouse
and obtain such application. In the event the Participant or spouse fails to
make application by the Participant's Required Beginning Date, subject to
Section 10.6, the Administrator shall commence distribution as of the Required
Beginning Date without such application. No payments shall be made for the
period in which benefits would have been payable if the Participant or spouse
had made timely application therefor; provided, however, that, if the
Participant's Benefit Commencement Date or, if the Participant has died, his
spouse's Benefit Commencement Date, has been delayed until after the
Participant's Normal Retirement Date solely by reason of failure to make
application, and not by reason of Suspension Service as described in Section
4.11(b), the benefit payable (i) to the Participant on and after his Benefit
Commencement Date, or (ii) to the Participant's spouse on and after the spouse's
Benefit Commencement Date, shall be equal to the Actuarial Equivalent of the
benefit the Participant or the spouse would have received had benefits commenced
on the Participant's Normal Retirement Date, as determined to reflect the
deferral of benefit commencement.
5.10 Direct Rollovers. Effective January 1, 1993, in the event any
payment or payments (excluding any amount not includible in gross income) to be
made to an individual from the Plan would constitute an "eligible rollover
distribution" within the meaning of Section 401(a)(31)(C) of the Code and
Treasury regulations thereunder, such individual may request that, in lieu of
payment to the individual, all or part of such eligible rollover distribution be
transferred directly to the trustee or custodian of an "eligible retirement
plan" within the meaning of Section 401(a)(31)(D) of the Code and Treasury
regulations thereunder. Any such request shall be made in writing, on the form
and subject to such requirements and restrictions as may be prescribed by the
Administrator for such purpose in accordance with applicable Treasury
regulations, at such time in advance of the date such payment would otherwise be
made as may be required by the Administrator. For purposes of this Section, an
"individual" shall include a Participant, or his surviving spouse, or his spouse
or former spouse who is an alternate payee under a qualified domestic relations
order within the meaning of Section 414(p) of the Code.
ARTICLE VI. Breaks in Service.
6.1 Whenever used in this Article:
(a) "One-Year Break in Service" means a calendar year in which
an Employee completes 500 or fewer Hours of Service.
56
(b) "Reemployment Date" means the first day on which an
Employee who has had a Separation from Service completes an Hour of
Service in a calendar year that is not a One-Year Break in Service.
(c) "Reemployment Eligibility Computation Period" means an
Eligibility Computation Period determined as if the Employee's Employment
Date were his Reemployment Date.
6.2 If an Employee has a Separation from Service before he has met
the requirements for retirement under Sections 4.1-4.3 or for a deferred annuity
under Section 4.4, he shall be deemed to have received a distribution of his
entire nonforfeitable Accrued Benefit of zero dollars upon such Separation from
Service and his Eligibility Years, Accrued Benefit, Benefit Years, and Vesting
Years shall be canceled.
6.3 If an Employee completes at least 1000 Hours of Service in a
Reemployment Eligibility Computation Period he shall be credited with an
Eligibility Year.
6.4 (a) The Eligibility Years of an Employee whose Eligibility Years
have been canceled shall be restored if:
(1) he is credited with an Eligibility Year with respect
to a Reemployment Eligibility Computation Period that begins on or after
his Reemployment Date; and
(2) he again becomes an Employee at a time when the
number of consecutive One-Year Breaks in Service he has incurred is less
than the greater of five or the number of Eligibility Years the Employee
had to his credit on account of his employment prior to the first One-Year
Break in Service.
(b) If a former Employee whose Eligibility Years were not
canceled under Section 6.2 or are restored under this Section becomes an
Eligible Employee, he shall become an Active Participant as of the later
of the day he so becomes an Eligible Employee or the day he would have
become an Active Participant under Article II if he had been an Eligible
Employee at all times since his prior Separation from Service. If a former
Employee whose Eligibility Years were canceled under Section 6.2 and are
not restored under this Section becomes an Eligible Employee, he shall
become an Active Participant as provided in Article II, except that his
Reemployment Date shall be treated as his Employment Date.
6.5 The Benefit Years and Accrued Benefit of an Employee whose
Benefit Years have been canceled shall be restored upon his reemployment if his
Eligibility Years are restored under Section 6.4. If a Participant's Benefit
Years and Accrued Benefit were not canceled pursuant to Section 6.2 upon his
prior Separation from Service, his Benefit Years earned prior to his Separation
from Service shall be aggregated with his Benefit Years earned after his
Reemployment Date for purposes of determining the Participant's Accrued Benefit;
provided, however, that:
57
(a) if the Participant previously received a single-sum
distribution under Section 5.6 on or before the close of the second Plan
Year following the Plan Year in which the Participant's Separation from
Service occurred, the Participant's Benefit Years earned prior to his
Separation from Service shall be disregarded upon his reemployment; or
(b) if the Participant received a single-sum distribution
under Section 5.6 on a date later than that described in Paragraph (a),
the Participant's Accrued Benefit determined on and after his reemployment
shall be reduced by the Actuarial Equivalent of the distribution received
by the Participant under Section 5.6 upon his prior Separation from
Service.
6.6 The Vesting Years of an Employee whose Vesting Years have been
canceled shall be restored if:
(a) he is credited with a Vesting Year after his Reemployment
Date; and
(b) he again becomes an Employee at a time when the number of
consecutive One-Year Breaks in Service he has incurred is less than the
greater of five or the number of Vesting Years the Employee had to his
credit on account of his employment prior to the first One-Year Break in
Service.
6.7 Notwithstanding any provision in the Plan to the contrary,
effective January 1, 1996, an Employee who was transferred to COPCO and whose
benefits were transferred from the Plan in connection with the sale of COPCO
shall receive, upon such Employee's Reemployment Date, credit for years of
service with the Company prior to such transfer for purposes of calculating
Eligibility Years and Vesting Years (but not Benefit Years).
ARTICLE VII. Contributions.
7.1 Contributions by the Company. The Company shall contribute each
year an amount actuarially determined to be sufficient to provide the benefits
under the Plan. All Company contributions to the Plan are conditioned upon their
deductibility for Federal income tax purposes. The Company reserves the right,
however, to reduce, suspend or discontinue its contributions under the Plan for
any reason at any time. Except as provided in this Section or Section 9.2, it
shall be impossible for any part of the Company's contributions to revert to the
Company, or to be used for, or diverted to, any purpose other than for the
exclusive benefit of Participants, annuitants and their beneficiaries. In the
case of a contribution (a) made by the Company as a mistake of fact, or (b) for
which a tax deduction is disallowed, in whole or in part, by the Internal
Revenue Service, the Company shall receive a refund of said contribution within
one year after payment of a contribution as a mistake of fact, or within one
year after disallowance of a tax deduction, to the extent of such disallowance,
as the case may be.
7.2 Source of Benefits. All benefits under the Plan shall be paid
exclusively from the Fund, and the Company shall have no duty to contribute
thereto except as provided in this Article.
58
ARTICLE VIII. Administration.
8.1 Exelon Corporation shall be the Administrator of the Plan for
purposes of the Employee Retirement Income Security Act of 1974, as amended.
8.2 The Administrator shall be the named fiduciary responsible for
administration of the Plan. The Administrator may, however, by or pursuant to a
resolution of its Board of Directors, delegate to any person or entity any of
its powers or duties under the Plan. To the extent of any such delegation, the
delegate shall become the named fiduciary responsible for administration of the
Plan (if the delegate is a fiduciary by reason of the delegation), and
references to the Administrator shall apply instead to the delegate. Any action
by the Administrator assigning any of its responsibilities to specific persons
who are all directors, officers, or employees of the Company shall not
constitute delegation of the Administrator's responsibility but rather shall be
treated as the manner in which the Administrator has determined internally to
discharge such responsibility.
8.3 The Administrator shall adopt such rules for administration of
the Plan as it considers desirable, provided they do not conflict with the Plan,
and shall have full discretionary power and authority to make benefit
eligibility determinations, make factual determinations, construe the Plan,
correct defects, supply omissions and reconcile inconsistencies to the extent
necessary to effectuate the Plan and such action shall be final, binding and
conclusive upon the parties. Records of administration of the Plan shall be
kept, and Employees and their beneficiaries may examine records pertaining
directly to themselves.
8.4 The Administrator may arrange for trustee legal, actuarial,
investment advisory, medical, accounting, clerical and other services to carry
out the Plan. The costs of such services and other administrative expenses shall
be paid by the Company or, at the option of the Company, from the Fund.
8.5 The Administrator shall annually review and determine the
funding policy of the Plan, with the advice of such experts as it deems
appropriate.
8.6 Any Participant or distributee who believes he or she is
entitled to benefits in an amount greater than those which he or she is
receiving or has received may file a claim with the Administrator (or its
delegate). Such a claim shall be in writing and state the nature of the claim,
the facts supporting the claim, the amount claimed, and the address of the
claimant. The Administrator (or its delegate) shall review the claim and, unless
special circumstances require an extension of time, within 90 days after receipt
of the claim, give notice to the claimant, either in writing by registered or
certified mail or in an electronic notification, of the decision with respect to
the claim. Any electronic notice delivered to the claimant shall comply with the
standards imposed by applicable regulations. If it is determined that special
circumstances require an extension of time for processing the claim, the
claimant shall be so advised in writing within the initial 90-day period and in
no event shall such an extension exceed 90 days. The extension notice shall
indicate the special circumstances requiring an extension of time and the date
by which it is expected that the benefit determination will be rendered. The
notice of the decision with respect to the claim shall be written in a manner
calculated to be understood by the claimant and, if the claim is wholly or
partially denied, shall notify the
59
claimant of the adverse benefit determination and shall set forth the specific
reasons for the adverse determination, the references to the specific Plan
provisions on which the determination is based, a description of any additional
material or information necessary for the claimant to perfect the claim, an
explanation of why such material or information is necessary, and a description
of the claim review procedure under the Plan and the time limits applicable to
such procedures, including a statement of the claimant's right to bring a civil
action under Section 502 of ERISA following an adverse benefit determination on
review. The notice shall also advise the claimant that the claimant or the
claimant's duly authorized representative may request a review by the
Administrator (or its delegate) of the adverse benefit determination by filing,
within 60 days after receipt of a notification of an adverse benefit
determination, a written request for such review. The claimant shall be informed
that, within the same 60-day period, he or she (a) may be provided, upon request
and free of charge, reasonable access to, and copies of, all documents, records
and other information relevant to the claimant's claim for benefits and (b) may
submit written comments, documents, records and other information relating to
the claim for benefits. If a request is so filed, review of the adverse benefit
determination shall be made by the Administrator (or its delegate) within,
unless special circumstances require an extension of time, 60 days after receipt
of such request, and the claimant shall be given written notice of the final
decision. If it is determined that special circumstances require an extension of
time for processing the claim, the claimant shall be so advised in writing
within the initial 60-day period and in no event shall such an extension exceed
60 days. The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the determination on review is
expected to be rendered. The review shall take into account all comments,
documents, records and other information submitted by the claimant relating to
the claim, without regard to whether such information was submitted or
considered in the initial benefit determination. The notice of the final
decision shall include specific reasons for the determination and references to
the specific Plan provisions on which the determination is based and shall be
written in a manner calculated to be understood by the claimant.
8.7 All rules, decisions and designations by the Company or the
Administrator under the Plan shall be made in a non-discriminatory manner, and
persons similarly situated shall be treated alike.
8.8 Neither the Company nor any of its directors, officers or
employees shall be liable for any loss due to its or his error or omission in
administration of the Plan unless the loss is due to the gross negligence or
willful misconduct of the party to be charged or is due to the failure of the
party to be charged to exercise a fiduciary responsibility with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims.
ARTICLE IX. Amendment and Termination.
9.1 Amendment. Exelon Corporation may amend the Plan at any time for
any reason. Each amendment to the Plan shall be adopted by Exelon Corporation's
Board of Directors through resolutions; provided, however, that the Senior Vice
President and Chief Human Resources Officer of the Exelon Corporation, or such
other appropriate officer of Exelon Corporation as shall be identified in a
written delegation of amendment authority made by
60
Exelon's Board of Directors, may continue to make, in writing, all technical,
administrative, regulatory, and compliance amendments to the Plan, and any other
amendment that will not significantly increase the cost of the Plan to the
Company as such officer shall deem necessary or appropriate without the approval
of Exelon's Board of Directors. If an amendment changes the vesting provisions
of the Plan, any person who is a Participant on the later of the date the
amendment is adopted or becomes effective shall have at all times a vested
interest in his Accrued Benefit as of that date determined without regard to the
amendment. In addition, within a reasonable period determined by the Exelon
Corporation in accordance with regulations issued by the Secretary of the
Treasury, any Participant who has at least three Vesting Years to his credit on
the last day of the election period may elect to have his vested interest in his
entire Accrued Benefit determined without regard to the amendment. Except as
otherwise permitted by law, no amendment shall reduce a Participant's Accrued
Benefit nor result in the elimination or reduction of a benefit "protected"
under Section 411(d)(6) of the Code.
9.2 Termination. Exelon Corporation may terminate or partially
terminate the Plan through resolutions adopted by Exelon's Board of Directors.
If the Plan is terminated or partially terminated, the assets of the Plan shall
be allocated, subject to Section 9.3, as provided in Section 4044 of the
Employee Retirement Income Security Act of 1974 (as it may be from time to time
amended or construed by any appropriate governmental agency or corporation),
without subclasses. Any amount remaining after all fixed and contingent
liabilities of the Plan have been satisfied shall be returned to Exelon
Corporation. Allocations under this Section shall be nonforfeitable. Except as
otherwise required by law, the time and manner of distribution of the assets
shall be determined by Exelon Corporation by amendment to the Plan pursuant to
Section 9.1.
9.3 Limitation on Benefits. The following provisions shall be
effective with respect to distributions made on or after May 14, 1990;
distributions made prior to May 14, 1990 shall be subject to the restrictions
described in Treas. Reg. Section 1.401-4(c).
(a) In the event of Plan termination, the benefit payable to
any Highly Compensated Employee shall be limited to a benefit that is
nondiscriminatory under Section 401(a)(4) of the Code. If payment of
benefits is restricted in accordance with this Paragraph (a), assets in
excess of the amount required to provided such restricted benefits shall
become a part of the assets available under Section 9.2 for allocation
among Participants and beneficiaries of Participants whose benefits are
not restricted under this Paragraph (a).
(b) The restrictions of this Paragraph (b) shall apply prior
to termination of the Plan to any Participant who is a Highly Compensated
Employee and who is one of the 25 highest paid employees or former
employees of the Company and all Affiliates for any Plan Year. The annual
payments made from the Plan on behalf of any such Participant shall be
limited to an amount equal to (1) the payments that would have been made
under a single life annuity that is the Actuarial Equivalent of the sum of
the Participant's Accrued Benefit and any other benefits under the Plan
(other than a social security supplement) and (2) the payments that the
Participant is entitled to receive under a social security supplement.
61
(c) The restrictions in Paragraph (b) shall not apply:
(1) if, after the payment of benefits to or on behalf of
such Participant, the value of the Plan assets equals or exceeds 110
percent of the value of the current liabilities (within the meaning of
Section 412(l)(7) of the Code);
(2) if the value of the benefits payable to or on behalf
of the Participant is less than one percent (1%) of the value of current
liabilities before distribution; or
(3) if the value of the benefits payable to or on behalf
of the Participant does not exceed $5,000.
ARTICLE X. Miscellaneous.
10.1 Forfeitures. All forfeitures arising under the Plan shall be
used as soon as possible to reduce the Company's contributions and shall not be
applied to increase the benefits any person would otherwise receive under the
Plan.
10.2 Mergers, Etc. No merger or consolidation with, or transfer of
any of the Plan's assets or liabilities to, any other plan shall occur at any
time unless each Participant and annuitant would (if the Plan had then
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).
10.3 Nonalienation of Benefits. Except (a) to the extent permitted
by the Employee Retirement Income Security Act of 1974, (b) pursuant to a
qualified domestic relations order, (c) to the extent required to satisfy a
Federal tax levy made pursuant to Section 6331 of the Code, or (d) effective as
of January 1, 1997, pursuant to Section 401(a)(13) of the Code, to the extent a
judgement relates to the Participant's conviction of a crime involving the Plan,
or a judgment, order, decree or settlement agreement between the Participant and
the Secretary of Labor or the Pension Benefit Guaranty Corporation relates to a
violation of part 4 of subtitle B of title I of ERISA, no benefit under this
Plan may be voluntarily or involuntarily assigned or alienated. Notwithstanding
the above, a Participant may authorize the Administrator to deduct from benefit
payments under the Plan up to 10% of each such payment as contributions to a
Company political action committee. Any such authorization shall be revocable by
the Participant at any time.
10.4 Effect on Employment. This Plan shall not confer upon any
person any right to be continued in the employment of the Company.
10.5 Facility of Payment. If the Company deems any person incapable
of receiving benefits to which he is entitled by reason of minority, illness,
infirmity, or other incapacity, it may direct that payment be made directly for
the benefit of such person or to any person selected by the Company to disburse
it, whose receipt shall be a complete acquittance therefor. Such payments shall,
to the extent thereof, discharge all liability of the Company and the party
making the payment.
62
10.6 Lost Payees. If a Participant, spouse or other beneficiary to
whom a benefit is payable under the Plan cannot be located following a
reasonable effort to do so by the Administrator, such benefit shall be
forfeited. Whether or not efforts to locate a Participant have previously been
made, the Administrator shall make reasonable efforts to locate the Participant
(or the spouse of a deceased Participant) during the one-year period preceding
the Participant's Required Beginning Date. If such efforts fail to locate the
Participant or spouse, such Participant or spouse shall be presumed dead as of
the Required Beginning Date and any benefit payable to the Participant or spouse
shall be forfeited. In any case, if a claim for a forfeited benefit is
subsequently filed by the Participant, spouse or beneficiary, such benefit shall
be reinstated and paid in accordance with the appropriate provisions of the
Plan.
10.7 Applicable Law. Except as provided by Federal law, the Plan
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
10.8 Effective Date. The provisions of this instrument apply only to
individuals who complete an Hour of Service on or after the effective date
stated under the title of the Plan on page one. The eligibility and benefits of
any other person shall be determined under the Plan as in effect when he last
separated from service except as expressly provided with respect to him by
amendment adopted thereafter.
ARTICLE XI. Top-Heavy Provisions.
11.1 Definitions. Whenever used in this Article:
"Determination Date" means, with respect to any Plan Year, the last
day of the preceding Plan Year, or, in the case of the first Plan Year, the last
day of such year.
"Key Employee" means any Participant who, at any time during the
Plan Year or any of the four preceding Plan Years, is an individual described in
Section 416(i) of the Code and the regulations thereunder.
"Permissive Aggregation Group" means a group of qualified retirement
plans maintained by the Company or any Affiliate, which group consists of the
Required Aggregation group and any other plan or plans which, considered
together with the Required Aggregation Group, meet the requirements of Sections
401(a)(4) and 410 of the Code.
"Required Aggregation Group" means the group of qualified retirement
plans maintained by the Company or an Affiliate, including a frozen plan or a
plan that has been terminated during the five-year period ending on the
Determination Date, which group consists of this Plan, each other plan in which
a Key Employee is a participant (or, in the case of a terminated plan was a
participant in such five-year period) and each other plan that enables any such
plan to meet the requirements of Section 401(a)(4) or 410 of the Code, but only
if such group includes this Plan. Otherwise, the Required Aggregation Group
consists of this Plan only.
"Top-Heavy Plan Year" means a Plan Year that begins after December
31, 1983, in which the Plan is top-heavy. The Plan is top-heavy for a given Plan
Year if for that Plan Year (1) the Required Aggregation Group is top-heavy, and
(2) the Required Aggregation Group is not part of a Permissive Aggregation Group
that is not top-heavy. The Required Aggregation
63
Group or a Permissive Aggregation Group (the "Group") is top-heavy for a given
Plan Year if the present value of the cumulative accrued benefits (or, the
aggregate of the accounts, in the case of a defined contribution plan included
in such Group) of participants who are Key Employees exceeds 60% of the like
amount determined for all participants in all plans included in such Group. For
purposes of this definition:
(a) the present value of the accrued benefit or the account of
any participant shall be increased by the amount of all plan distributions
to such participant during the five year period ending on the
Determination Date; provided that no such increase shall arise from any
rollover contribution or plan-to-plan transfer from this Plan that is not
initiated by the participant or is made to another plan maintained by the
Company or an Affiliate;
(b) the present value of the accrued benefit or the account of
a participant who has been a Key Employee but no longer is a Key Employee
shall not be taken into account;
(c) the present value of the accrued benefit or the account of
any Participant who has not performed services for the Company or an
Affiliate at any time during the five-year period that ends on the
Determination Date shall not be taken into account;
(d) any rollover contribution or plan-to-plan transfer to this
Plan that is initiated by a participant and made from a plan that is not
maintained by the Company or an Affiliate after December 31, 1983 shall
not be taken into account; and
(e) the present value of accrued benefits shall be determined,
effective January 1, 1987, under the method used for accrual purposes for
all plans maintained by the Company and all Affiliates if a single method
is used by all such plans, or, otherwise, the slowest accrual method
permitted under Section 411(b)(1)(C) of the Code.
11.2 Top-Heavy Operating Rules. Anything in the Plan to the contrary
notwithstanding, the following rules shall apply in a Top-Heavy Plan Year:
(a) For purposes of determining benefits under this Article
XI, "compensation" shall mean compensation as reported on Forms W-2 by the
Company or any Affiliate for such Plan Year and the maximum amount of
compensation of any Participant who is an Employee during such Plan Year
shall be $150,000, or such other amount as may apply to such Participant
pursuant to Section 401(a)(17) of the Code and regulations issued
thereunder.
(b) For purposes of determining the maximum annuity in Section
4.6 for Plan years beginning before January 1, 2000, "1.0" shall be
substituted for "1.25", wherever it appears.
(c) The Accrued Benefit which each Participant who is an
Employee but not a Key Employee under this Plan derives from contributions
by the Company shall be increased by the amount necessary to cause the
Accrued Benefits payable to each
64
Participant in such year, when expressed as a benefit payable annually in
the form of a Single Life Annuity, to equal at least the required minimum
benefit, where the required minimum benefit is the product of:
(1) the average of the Participant's compensation for
the five consecutive Plan Years that yield the highest average,
disregarding Plan Years which begin before January 1, 1984, and Plan Years
which are not Top-Heavy Plan Years, and
(2) the lesser of:
(A) 2 percent multiplied by the number of Vesting
Years with the Company which were also Top-Heavy Plan Years and which were
completed after January 1, 1984; or
(B) 20 percent.
For purposes of determining whether an increase in benefit accrual is required,
all plans included in the Required Aggregation Group shall be treated as one
plan.
(d) Anything in the Plan to the contrary notwithstanding, in
any Top-Heavy Plan Year, a Participant who does not otherwise have a
nonforfeitable right to 100% of his Accrued Benefit shall have a
nonforfeitable right to a percentage of his Accrued Benefit in accordance
with the following schedule:
Nonforfeitable
Vesting Years Percentage
2 20
3 40
4 60
5 100
In any Plan Year following the last Top-Heavy Plan Year, any Employee who
is a Participant on the last day of the last Top-Heavy Plan Year shall
have at all times a vested interest in his Accrued Benefit as of that date
determined under the schedule set forth above. In addition, within a
reasonable period determined by the Company, any Participant who has at
least three Vesting Years to his credit on that date may elect to have his
vested interest in his entire Accrued Benefit determined under the
schedule set forth above.
ARTICLE XII. Post Retirement Health Benefits.
12.1 Eligibility
(a) Effective December 1, 1994, post-retirement health befits
may be paid under this Article, to the extent the Company elects to fund
benefits under this Article, to any Participant, who is receiving or has
received pension benefits under this Plan, and if applicable, to the
spouse or dependents of such Participant; provided,
65
however, that the Company may, in its discretion, decide not to provide
post-retirement health benefits under this Article for Key Employees (as
defined in Section 11.1) and, if applicable, their spouses and dependents.
(b) In addition to satisfying the requirements of Subsection
(a), any person claiming post-retirement health benefits under this Plan
must meet all applicable requirements imposed in the post-retirement
health plans maintained by the Company. All determinations of benefit
levels and eligibility for benefits shall be made pursuant to the terms of
such post-retirement health plans.
(c) The establishment of an account under this Article XII to
provide payment for post-retirement health benefits shall not obligate the
Company to maintain its post-retirement health plans, and the Company
shall retain the same ability to amend or terminate such post-retirement
health plans as if this Article XII did not exist.
Notwithstanding the foregoing, post-retirement health benefits shall not
be available for any Power Team Employee.
12.2 Benefits Provided.
(a) Benefits under this Article shall include all health
benefits provided by the post-retirement health plans maintained by the
Company, including payment of Medicare Part B premiums to the extent
provided by such post-retirement health plans, to the extent such benefits
are not otherwise provided by the Company.
(b) Benefits under this Article shall be provided using any
method or combination of methods as the Company shall deem appropriate,
including, but not limited to , purchase of insurance and the payment of
premiums for such insurance, direct reimbursement of costs incurred by the
provider of such benefits or reimbursement to the individual to whom such
benefits were provided.
(c) Benefits and coverage under this Article shall not be
discriminatory in favor of officers, shareholders, supervisory employees
or highly compensated employees.
12.3 Establishment of Accounts.
(a) A separate account shall be maintained with respect to the
contributions to fund benefits under this Article. This account is to be
maintained for accounting purposes only. Funds accounted for in such
account may be invested on a commingled basis with pension benefit
contributions under this Plan without identification of which investments
are allocable to each account, provided that earnings on all Plan assets
are allocated in a reasonable manner.
(b) If the Company elects to fund post-retirement health
benefits for Key Employees under this Article, as separate account shall
be maintained for post-retirement health benefits payable to each Key
Employee, his spouse and dependents. Benefits under this Article shall be
payable to such Key Employee, spouse and
66
dependents only from such account. The separate account maintained under
this Subsection (b) shall be a true separate account, and not maintained
merely for accounting purposes. Commingling of assets held in such account
with any other Plan assets is not permitted. For purposes of section 415
of the Code contributions allocated to any separate account under this
Subsection (b) shall be treated as an annual addition to a defined
contribution plan.
12.4 Funding.
(a) Contributions to provide benefits under this Article may
be contributory or non-contributory, in accordance with the terms of the
post-retirement health plans maintained by the Company.
(b) Amounts contributed to fund post-retirement health
benefits shall be reasonable and ascertainable. The total amount
contributed to fund post-retirement health benefits under this Article
shall not exceed the cost of providing such benefits. The total cost of
providing such benefits shall be determined in accordance with a generally
accepted actuarial method selected by the Company which is reasonable in
view of the provisions and coverage of the Plan, the funding medium and
other relevant considerations, including, but not limited to, applicable
Treasury regulations. For purposes of determining the cost of providing
post-retirement health benefits, the actuarial method may take into
account reasonable projected increases in the cost of providing health
benefits. Forfeitures, if any, under this Article shall be applied as soon
as possible to reduce employer contributions to fund benefits under this
Article.
(c) Post-retirement health benefits provided under this
Article, when added to life insurance protection provided under the Plan,
shall be incidental and subordinate to pension benefits provided under the
Plan. For purposes of this Article, post-retirement health benefits shall
be considered incidental and subordinate if the aggregate of the
contributions for post-retirement health benefits provided under this
Article plus the contributions for life insurance protection under this
Plan does not exceed 25 percent of the total contributions to the Plan
(other than for past service credit) made on or after December 1, 1994.
(d) Until the satisfaction of all liabilities to be provided
under this Article, neither amounts contributed to fund post-retirement
health benefits under this Article nor earnings thereon shall be used for
or diverted to any purpose other than providing such benefits or payment
of necessary or appropriate expenses attributable to the administration of
post-retirement health accounts under this Article. Any amounts
contributed to fund medical benefits under this Article remaining in a
post-retirement health account after the satisfaction of all liabilities
arising under this Article must be returned to the Company.
(e) Nothing in this Article shall obligate the Company to pay
benefits described in Section 12.2 to the extent those benefits exceed
assets contributed to the Fund to provide post-retirement health benefits
under this Article. Furthermore, nothing in this Article shall imply that
amounts contributed to the Fund to provide pension or
67
other benefits (other than post-retirement health benefits) available
under the Plan will be used to provide post-retirement health benefits
under this Article. The Company may, in its discretion, fund all or any
part of the benefits described in Section 12.2 from other sources or may
pay such benefits out of its general assets as the benefits become
payable.
(f) If in any proceeding subsequent to December 1, 1994, under
Section 1308 of the Pennsylvania Public Utility Code, the Company is not
permitted to fully recover in rates the contributions made to the separate
account maintained to fund benefits under this Article, the Company, at
its discretion, may elect to defer or discontinue funding the benefits
under this Article.
68
IN WITNESS WHEREOF, the Company has caused this instrument to be executed
by its duly authorized officers on this _______ day of _________________, 2001.
EXELON CORPORATION
By ________________________________
Title _______________________________
ATTEST:
________________________________
Title __________________________
69
SERVICE ANNUITY PLAN
APPENDIX A
Actuarial equivalence under this Plan shall mean a benefit of
equivalent value when computed using a 7% interest rate and the mortality tables
attached to the Plan as Exhibit A (for pensioners) and B (for beneficiaries, if
applicable), with such exceptions as specifically set forth in the Plan.
For distributions on or after January 1, 2000, the lump sum
Actuarial Equivalent of a Participant's Accrued Benefit for purposes of Section
5.6 shall be determined using the annual rate of interest on 30-year Treasury
securities as specified by the Commissioner of the Internal Revenue Service
pursuant to section 417(e)(3)(A) of the Code and regulations issued thereunder
for the second full calendar month preceding the first day of the Plan Year
containing the date of distribution, and the mortality table shall be the
mortality table prescribed by the Commissioner of Internal Revenue Service
pursuant to section 417(e)(3)(A) of the Code on the date as of which the single
sum payment is being determined, if the use of such assumptions would result in
a greater benefit.
For the period beginning January 1, 2000, and ending on the date of
adoption of this amendment and restatement, the lump sum Actuarial Equivalent of
a Participant's Accrued Benefit for purposes of Section 5.6 shall be determined
on the basis of the assumptions which would be used as of the first day of the
Plan Year containing the date of distribution by the Pension Benefit Guaranty
Corporation for purposes of determining the present value of a lump sum
distribution upon plan termination, if the use of such assumptions would result
in a greater benefit.
70
APPENDIX B
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE
Excess if Age of Participant Applicable
over Age of Beneficiary Percentage
10 years or less................................... 100%
11................................................. 96%
12................................................. 93%
13................................................. 90%
14................................................. 87%
15................................................. 84%
16................................................. 82%
17................................................. 79%
18................................................. 77%
19................................................. 75%
20................................................. 73%
21................................................. 72%
22................................................. 70%
23................................................. 68%
24................................................. 67%
25................................................. 66%
26................................................. 64%
27................................................. 63%
28................................................. 62%
29................................................. 61%
30................................................. 60%
31................................................. 59%
32................................................. 59%
33................................................. 58%
34................................................. 57%
35................................................. 56%
36................................................. 56%
37................................................. 55%
38................................................. 55%
39................................................. 54%
40................................................. 54%
41................................................. 53%
42................................................. 53%
43................................................. 53%
44 and greater..................................... 52%
SCHEDULE A - RETIREMENT FACTORS
ENHANCED AGE AT BENEFIT ENHANCED RETIREMENT FACTORS
COMMENCEMENT DATE
- ----------------------- ---------------------------
50 80%
51 84%
52 88%
53 92%
54 96%
55 100%
56 100%
57 100%
58 100%
59 100%
60 100%
61 100%
62 100%
62 100%
63 100%
64 100%
65 100%
The foregoing factors will be interpolated based on the Eligible Participant's
Age rounded to the nearest month.
SCHEDULE B-ENHANCED DEFERRED VESTED PENSION FACTORS
ACTUAL AGE VESTED BENEFITS BEGIN
--------------------------------
ENHANCED AGE (Greater Than/
AT TERMINATION 50 51 52 53 54 55 56 57 58 59 Equal to) 60
- -----------------------------------------------------------------------------------------------------------------------------------
(Greater Than/
Equal to) 49 70.0% 73.0% 76.0% 79.0% 82.0% 85.0% 88.0% 91.0% 94.0% 97.0% 100.0%
48 69.0% 72.1% 75.2% 78.3% 81.4% 84.5% 87.6% 90.7% 93.8% 96.9% 100.0%
47 68.0% 71.2% 74.4% 77.6% 80.8% 84.0% 87.2% 90.4% 93.6% 96.8% 100.0%
46 67.0% 70.3% 73.6% 76.9% 80.2% 83.5% 86.8% 90.1% 93.4% 96.7% 100.0%
45 66.0% 69.4% 72.8% 76.2% 79.6% 83.0% 86.4% 89.8% 93.2% 96.6% 100.0%
(Greater Than) 45 Reverts to Standard Deferred Vested Pension Plan factors under the regular terms of the Service Annuity
Plan.
The foregoing factors will be interpolated on the Eligible Participant's Age
rounded to the nearest months.