Exhibit 10.11(a)
ARIZONA PUBLIC SERVICE COMPANY
SUPPLEMENTAL EXCESS BENEFIT
RETIREMENT PLAN
TABLE OF CONTENTS
Page
ARTICLE ONE - PREAMBLE....................................... 1
ARTICLE TWO - CONSTRUCTION................................... 1
ARTICLE THREE - ELIGIBILITY AND PARTICIPATION.................. 2
ARTICLE FOUR - BENEFITS....................................... 3
ARTICLE FIVE - PAYMENT OF BENEFITS............................ 7
ARTICLE SIX - COORDINATION OF BENEFITS....................... 9
ARTICLE SEVEN - FUNDING........................................ 11
ARTICLE EIGHT - ADMINISTRATION................................. 11
ARTICLE NINE - AMENDMENT AND TERMINATION OF THE PLAN.......... 12
ARTICLE TEN - ASSIGNMENT..................................... 12
ARTICLE ELEVEN - WITHHOLDING................................................ 13
ARTICLE TWELVE - OTHER BENEFIT PLANS OF THE COMPANY......................... 13
ARTICLE THIRTEEN - MISCELLANEOUS............................................ 14
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ARIZONA PUBLIC SERVICE COMPANY
SUPPLEMENTAL EXCESS BENEFIT RETIREMENT PLAN
ARTICLE ONE
PREAMBLE
Effective January 1, 1982, ARIZONA PUBLIC SERVICE COMPANY (the
"Company") adopted the ARIZONA PUBLIC SERVICE COMPANY SUPPLEMENTAL EXCESS
BENEFIT RETIREMENT PLAN (the "Plan") for the purpose of paying retirement
benefits to certain employees in excess of the benefits permitted to be paid
under the Arizona Public Service Company Employees' Retirement Plan (the
"Retirement Plan") by reason of Section 415 of the Internal Revenue Code (the
"Code"). The Plan was thereafter amended several times to provide additional
benefits, thereby changing the Plan from an "excess benefit plan" under the
Employee Retirement Income Security Act of 1974, as amended (the "Act"), to a
"top hat" plan under the Act. By this amendment and restatement in the entirety,
the Company intends to extend certain benefits to eligible employees and to make
other technical changes.
ARTICLE TWO
CONSTRUCTION
Terms capitalized in this Plan shall have the meaning given in Article
Two of the Retirement Plan, governing definitions and construction, except where
such terms are otherwise defined in this Plan. If any provision of this Plan is
determined to be invalid or unenforceable for any reason, the remaining
provisions shall continue in full force and effect. All of
the provisions of this Plan shall be construed and enforced according to the
laws of the State of Arizona, and shall be administered according to the laws of
such state, except as otherwise required by the Act, the Code or other
applicable federal law. It is the intention of the Company that the Plan, as
adopted by the Company, shall constitute an "unfunded plan of deferred
compensation for a select group of management and highly compensated employees"
within the meaning of Sections 201(2) and 301(3) of the Act. Benefits under this
Plan shall be paid from the Company's general assets, and not from any trust
fund or other segregated fund. This Plan shall be construed in a manner
consistent with the Company's intention.
ARTICLE THREE
ELIGIBILITY AND PARTICIPATION
Employees of the Company who are members of a select group of
management or highly compensated employees, as determined by the Human Resources
Committee of the Board of Directors of the Company, in its discretion, and from
time to time, shall be eligible to participate in the Plan if they satisfy the
eligibility requirements of Section 3(a) on or after January 1, 1994, or Section
3(b) on or after January 1, 1996.
(a) Eligible employees who are officers of the Company shall be
entitled to the benefits described in Section 4(a).
(b) Eligible employees of the Company who are not officers, who are
designated for participation by the Human
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Resources Committee of the Company's Board of Directors and who are participants
in the Retirement Plan shall be entitled to the benefits described in Section
4(b). The Human Resources Committee may make its designations under this Section
3(b) by individual designation or by group designation.
A participant in this Plan shall commence participation in
this Plan as of the first day of the Plan Year in which he becomes a participant
pursuant to this ARTICLE THREE or the first day of his employment with the
Company, whichever is later. Such participation shall continue until the earlier
of the date on which the participant no longer satisfies the requirements for
participation under Section 3(a) or Section 3(b) or the date on which the Human
Resources Committee informs the participant in writing that he is no longer
eligible to participate in this Plan.
Notwithstanding the foregoing, if the status of a participant
changes for reasons other than termination of employment with the Company, so
that he no longer is eligible to participate in the Plan, his participation in
the Plan shall cease but his benefit under this Plan as of the date of his
change of status shall not be cancelled or distributed, but shall be determined
upon his termination of employment with the Company.
ARTICLE FOUR
BENEFITS
(a) Subject to ARTICLE SIX and ARTICLE SEVEN, a participant who is
eligible under Section 3(a) and who receives a
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benefit under the Retirement Plan shall be entitled to a monthly benefit equal
to the lesser of (i) or (ii), reduced by (iii), where
(i) Equals three percent (3%) of the participant's Average
Monthly Compensation multiplied by the participant's Years of Service,
not to exceed ten (10) Years of Service, plus two percent (2%) of the
participant's Average Monthly Compensation multiplied by the
participant's Years of Service in excess of ten
(10) Years of Service,
(ii) Equals sixty percent (60%) of the participant's Average
Monthly Compensation, and
(iii) Equals the amount of such participant's monthly benefit
determined under the terms of the Retirement Plan and payable in the
form of the qualified joint and survivor annuity described in Section
6.2 of the Retirement Plan.
For purposes of this Section 4(a), Compensation shall be determined
without regard to the limitation set forth in Section 401(a)(17) of the Code and
shall be increased by any cash payments made to the participant pursuant to
bonus or incentive plans maintained by the Company for employees generally and
by any amounts deferred by the participant under any of the Company's deferred
compensation plans for employees, provided that bonus or incentive payments made
in a form other than cash, bonus or incentive payments which are not "year-end"
bonus or
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incentive payments, bonus or incentive payments under individual agreements
between the Company and a participant, and cash payments made under bonus or
incentive plans maintained by the Company for employees generally which exceed
the maximum amount that the Human Resources Committee determines, in its
discretion, or, effective January 1, 1996, the Company's President or Chief
Operating Officer determines, in his or her discretion, may be taken into
account under this Plan shall not be taken into account as Compensation for
purposes of this Plan unless the Human Resources Committee determines in its
discretion or, effective January 1, 1996, the President or Chief Operating
Officer of the Company determines, in his or her discretion, that such bonus or
incentive payment shall be taken into account as Compensation under this Plan.
Eligible bonuses and incentive payments shall be taken into account as
Compensation in the year in which such amounts are paid rather than in the year
in which they are earned, provided that, effective January 1, 1996, the
President or Chief Operating Officer of the Company shall have the authority to
determine, in his or her discretion, that such bonus or incentive payment shall
be taken into account in the year in which such amounts are earned rather than
in the year in which they are paid. The Human Resources Committee (effective
January 1, 1996, the Company's President or Chief Operating Officer) shall have
the sole and absolute discretion to determine whether a bonus or incentive
payment made to a participant constitutes Compensation for purposes of this
Section 4(a) and
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may differentiate among individuals in establishing the bonus or incentive
payments that may be taken into account under the Plan.
(b) Subject to ARTICLE SIX and ARTICLE SEVEN, any participant
who is designated for participation pursuant to Section 3(b) and who receives a
benefit under the Retirement Plan, or such participant's surviving spouse or
annuitant in the event of the participant's death, shall be entitled to a
monthly benefit payable equal to (i) reduced by (ii), where
(i) Equals the amount of such participant's or surviving spouse's
or annuitant's monthly benefit under the Retirement Plan computed
under the provisions of the Retirement Plan but without regard to the
cap on Compensation in Section 2.1(o) and the limitations in Section
5.10 of the Retirement Plan and the provisions of Sections 401(a)(17)
and 415 of the Code; and
(ii) Equals the amount of such participant's or surviving
spouse's or annuitant's monthly benefit actually payable under the
terms of the Retirement Plan.
For purposes of this calculation, Compensation shall include any amount of the
participant's regular salary that the participant has elected to defer under any
of the Company's deferred compensation plans for employees and shall exclude all
bonus or incentive payments paid to the participant. The Human Resources
Committee shall have the sole and absolute discretion to determine a
participant's Compensation for purposes of this Section 4(b).
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Benefits payable under this Section 4(b) shall be payable to a Plan
participant or his spouse or other annuitant in the same manner and subject to
all the same options, conditions, privileges and restrictions as are applicable
to the benefits payable to the Plan participant, spouse or other annuitant of a
Participant under the Retirement Plan, as though such benefits were payable as a
part of the benefits being paid under the Retirement Plan.
ARTICLE FIVE
PAYMENT OF BENEFITS
(a) Subject to ARTICLE SIX, a participant entitled to benefits
under Section 4(a) may elect to commence receiving unreduced benefits on or
after the date on which the participant attains the age of sixty-five (65) years
or attains the age of sixty (60) years and is credited with at least twenty (20)
Years of Service. A participant may elect to commence receiving benefits earlier
if he has attained at least the age of fifty- five (55) years and is credited
with at least ten (10) Years of Service, provided that the participant's benefit
shall be reduced by three percent (3%) for each year (or part thereof) by which
the participant's retirement age precedes the date on which he would have
attained the age of sixty (60) years if he is credited with at least twenty (20)
Years of Service or the date on which he would have attained the age of
sixty-five (65) years if credited with less than twenty (20) Years of Service.
Notwithstanding the foregoing, in calculating the monthly benefit of a
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participant who elects to retire with a reduced early retirement benefit under
this Section 5(a), the participant's monthly benefit calculated under Section
4(a) shall not be reduced by the amount specified in Section 4(a)(iii) until the
date on which the participant attains the age of sixty (60) years. Upon the
participant's attainment of the age of sixty (60) years, the participant's
monthly benefit under Section 4(a) shall be reduced by the amount determined
under Section 4(a)(iii) as if such participant had elected to retire and begun
receiving Early Retirement Benefits under the Retirement Plan upon attaining
such age.
Benefits payable to a Participant under Section 4(a) shall be payable
in the form of a fifty percent (50%) joint and survivor annuity, which shall
provide a monthly payment to the participant for his life equal to the amount
determined under Section 4(a) and upon his death, shall provide monthly payments
to the participant's spouse for life equal to fifty percent (50%) of the monthly
payments being received by the participant at the time of his death.
If a participant entitled to benefits under Section 4(a) dies prior to
commencing benefits, the participant's spouse shall be entitled to a survivor
annuity equal to fifty percent (50%) of the monthly benefit that the participant
would have received had he terminated employment on the day before his death,
survived to the age on which he would first be eligible to
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commence benefits under this Section 5(a), elected to retire and commence
benefits under the Plan at that time and then died.
(b) Benefits payable to a participant under Section 4(b) shall become
payable when a participant (or his spouse or annuitant) begins to receive
payments under the Retirement Plan, and shall be subject to the same adjustments
and shall be payable by the Company in the same manner and at the same time as
the Plan participant's (or his spouse's or annuitant's) benefits under the
Retirement Plan are paid, as though such benefits were otherwise payable as a
part of the benefits being paid under the Retirement Plan, subject to ARTICLE
SIX. An election of mode of payment under the Retirement Plan shall constitute
an election of a similar mode of payment under this Plan.
ARTICLE SIX
COORDINATION OF BENEFITS
(a) Notwithstanding any provision in this Plan to the contrary, the
benefits payable under Section 4(a) of this Plan to a participant who is also
entitled to benefits as an officer under the Pinnacle West Capital Corporation
Supplemental Excess Benefit Retirement Plan (the "Pinnacle West Plan") shall be
offset and reduced by that portion of the benefit payable under the Pinnacle
West Plan which is attributable to Years of Service with an Affiliate.
In no event shall the benefit payable under Section 4(a) of this Plan,
when combined with the benefit payable under the corresponding provision of the
Pinnacle West Plan, exceed the
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amount that would have been payable under Section 4(a) of this Plan alone if (i)
the participant's Compensation and Years of Service earned as a result of
employment with an Affiliate had been earned as a result of employment with the
Company, and (ii) the benefit payable to the participant in the form of a
qualified joint and survivor annuity under the Pinnacle West Capital Corporation
Employees' Retirement Plan was payable from the Retirement Plan.
(b) If an employee who was participating in a retirement plan
sponsored by an Affiliate, which is not a participating employer in the
Retirement Plan, becomes an employee of the Company and a participant in the
Plan under Section 4(b) and such employee's accrued benefit under the retirement
plan maintained by the Affiliate formerly employing him is transferred to the
Retirement Plan, upon termination of employment, the employee's benefits,
calculated in accordance with Section 4(b), will be payable in full from the
Plan in accordance with Section 5(b). If an employee who was a participant in
the retirement plan of an Affiliate, which is not a participating employer in
the Retirement Plan, becomes an employee of the Company and a participant in
this Plan, and such employee's accrued benefit under the retirement plan
maintained by his former employer is not transferred to the Retirement Plan,
upon termination of employment, the employee's benefits, calculated in
accordance with Section 4(b), will be payable from the Plan in accordance with
Section 5(b) to the extent such benefits are attributable to the pension
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benefits payable to that employee under the Retirement Plan. The benefits
calculated pursuant to Section 4(b) that are attributable to the pension
benefits payable to the employee under the Retirement Plan are those benefits
that bear the same ratio to the total benefits due to the employee, calculated
pursuant to Section 4(b), as the benefit payable to the employee from the
Retirement Plan bears to the total benefits payable to the employee under both
the Retirement Plan and the retirement plan maintained by the Affiliate formerly
employing that employee.
ARTICLE SEVEN
FUNDING
Benefits under this Plan shall be payable from the general assets of
the Company and shall not be segregated in a trust fund or otherwise funded in
any manner prior to the time of payment. No Plan participant shall have any
vested rights hereunder nor any right hereunder to any specific assets of the
Company.
ARTICLE EIGHT
ADMINISTRATION
The Plan will be administered by the Administrative Committee that
administers the Retirement Plan. Except as otherwise expressly provided in this
Plan, the Administrative Committee shall have the same powers and
responsibilities as it has under Sections 10.4 and 12.2 of the Retirement Plan.
Claims
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for benefits under the Plan shall be determined in the manner set forth in
Article Eleven of the Retirement Plan.
ARTICLE NINE
AMENDMENT AND TERMINATION OF THE PLAN
This Plan may be amended in whole or in part, prospectively or
retroactively, by action of the Company's Board of Directors, and may be
terminated at any time by action of the Board of Directors; provided, however,
that no such amendment or termination shall reduce any amount payable hereunder
to the extent such amount accrued prior to the date of amendment or termination.
All amendments shall be in writing, approved by the Company's Board of Directors
and executed by a duly authorized officer of the Company.
ARTICLE TEN
ASSIGNMENT
No Plan participant or beneficiary of a Plan participant shall have
any right to assign, pledge, hypothecate, anticipate or any way create a lien on
any amounts payable hereunder. No amounts payable hereunder shall be subject to
assignment or transfer or otherwise be alienable, either by voluntary or
involuntary act, or by operation of law, or be subject to attachment, execution,
garnishment, sequestration or other seizure under any legal, equitable or other
process, or be liable in any way for the debts or defaults of Plan participants
and their beneficiaries. Notwithstanding the foregoing, assignments of the
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benefits provided under this Plan shall be permitted for purposes of satisfying
family support obligations if such assignments are pursuant to a court order
which satisfies the requirements for a "qualified domestic relations order" as
defined in Section 206(d)(3) of the Act.
ARTICLE ELEVEN
WITHHOLDING
Any taxes required to be withheld from payments to Plan participants
hereunder shall be deducted and withheld by the Company.
ARTICLE TWELVE
OTHER BENEFIT PLANS OF THE COMPANY
Nothing contained in this Plan shall prevent a Plan participant prior
to his death, or his spouse or other annuitant after his death, from receiving,
in addition to any payments provided for under this Plan, any payments provided
for under the Retirement Plan or under The Savings Plan for Employees of Arizona
Public Service Company, or which would otherwise be payable or distributable to
him, his surviving spouse or annu- itant under any plan or policy of the Company
or otherwise. Nothing in this Plan shall be construed as preventing the Company
or any of its subsidiaries from establishing any other or different plans
providing for current or deferred compensation for employees.
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ARTICLE THIRTEEN
MISCELLANEOUS
Nothing contained in this Plan shall be construed as a contract of
employment between the Company and an employee, or as a right of any employee to
be continued in the employment of the Company, or as a limitation of the right
of the Company to discharge any of its employees, with or without cause.
All of the provisions of this Plan shall be binding upon all persons
who shall be entitled to any benefit hereunder, their heirs and personal
representatives.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by
its duly authorized officers this 20th day of December, 1995.
ARIZONA PUBLIC SERVICE COMPANY
By Armando Flores
----------------------------
Its Vice President, Human Resources
"Company"
Attest:
By Nancy C.Loftin
-----------------------------------
Its Secretary and Corporate Counsel
--------------------------------
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