Exhibit 10(n)-1
PP&L, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Amended and Restated
Effective as of January 1, 1998
PP&L, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1998
TABLE OF CONTENTS
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ARTICLE PAGE
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1. Purpose.............................................
2. Definitions.........................................
3. Entitlement to Benefits.............................
4. Amount of Supplemental Executive Retirement Benefit.
5. Time of Payment.....................................
6. Method of Payment...................................
7. Death Benefit.......................................
8. Administration......................................
9. Miscellaneous ......................................
10. Termination or Amendment............................
11. Effective Date......................................
Appendix A..........................................
PP&L, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
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WHEREAS, PP&L, Inc. ("PP&L") adopted the PP&L, Inc. Supplemental Executive
Retirement Plan (the "Plan"), effective July 1, 1985, as amended and restated
from time to time, for certain of its employees; and
WHEREAS, PP&L desires at this time to amend and restate the Plan;
NOW, THEREFORE, effective as of January 1, 1998, the Plan is continued,
amended and restated as hereinafter set forth:
1 . Purpose. The purpose of this Supplemental Executive Retirement Plan is to
provide certain executive officers of PP&L additional retirement income so
that total retirement income for key officers is competitive with other
employers and in order to facilitate early retirement from key positions
carrying the most important responsibilities.
2. Definitions.
(a) "ACTUARIAL EQUIVALENT" means having or that which has equal actuarial
value to the Supplemental Executive Retirement Benefit based on the
(1) For purposes of the annuity forms of benefit described in Article
6, a Participant's SERB as calculated under Article 4 shall be
converted to an optional annuity form of benefit by using the
assumptions and factors described in Schedule A of the Retirement
Plan.
(2) For purposes of the single sum form of benefit described in
Article 6, the Participant's SERB as calculated under Article 4,
shall be converted to a single sum by using the following
factors:
(A) An interest rate equal to the immediate annuity rate that
would be used by the Pension Benefit Guaranty Corporation
for purposes of determining a lump sum distribution upon
plan termination, as in effect for the month in which the
Participant's benefit commencement date occurs.
(B) A mortality rate based on the 1983 GAM Unisex Table.
(b) "Affiliated Company" or "Affiliated Companies" shall mean any parent
or subsidiaries of PP&L (or companies under common control with PP&L)
which are members of the same controlled group of corporations (within
the meaning of section 1563(a) of the Code) as PP&L.
(c) "Board" means the Board of Directors of PP&L, Inc.
(d) "Cause" for Participant's Termination of Employment by PP&L means:
(1) and continued failure by Participant to substantially perform
Participant's duties with PP&L or an Affiliated Company (other
than any such failure resulting from Participant's incapacity due
to physical or mental illness or, if applicable, any such actual
or anticipated failure after the issuance of any "Notice of
Termination for Good Reason" by the Participant pursuant to any
severance agreement between Participant and PP&L or an Affiliated
Company) after a written demand for substantial performance is
delivered to Participant by the Board, which demand specifically
identifies the manner in which the Board believes that Participant
has not substantially performed Participant's duties, or
(2) the willful engaging by Participant in conduct which is
demonstrably and materially injurious to PP&L or an Affiliated
Company, monetarily or otherwise.
(3) For purposes of Subsections (1) and (2) of this definition, (A) no
act, or failure to act, on Participant's part shall be deemed
"willful" unless done, or omitted to be done, by Participant not
in good faith and without reasonable belief that Participant's
act, or failure to act, was in the best interest of PP&L or the
Affiliated Company, and (B) in the event of a dispute concerning
the application of this provision, no claim by PP&L or an
Affiliated Company that Cause exists shall be given effect unless
PP&L or the
Affiliated Company establishes to the Board by clear and
convincing evidence that Cause exists.
(e) "CHANGE IN CONTROL" means the occurrence of any one of the following
events:
(1) any change in the control of Resources of a nature that would be
required to be reported in response to Item 1(a) of Form 8-K under
the Exchange Act;
(2) during any period of not more than two consecutive years,
individuals who at the beginning of such period constitute the
Board of Directors of Resources and any new director (other than a
director designated by a Person who has entered into an agreement
with Resources to effect a transaction described in Paragraph (1),
(3) or (4) of this definition) whose election by the Board of
Directors of Resources or nomination for election by the
shareowners of Resources was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved or
recommended, cease for any reason to constitute at least a
majority thereof;
(3) any Person becomes the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Resources representing 20% or more of the combined
voting power of Resources' then outstanding securities entitled to
vote generally in the election of directors;
(4) the approval by the shareowners of Resources of any merger or
consolidation of Resources with any other corporation or a plan of
complete liquidation of Resources or the sale or other disposition
of all or substantially all of the assets of Resources to any
other person or persons unless, after giving effect thereto, (A)
holders of Resources' then outstanding securities entitled to vote
generally in the election of directors will own a majority of the
outstanding stock entitled to vote generally in the election of
directors of the continuing, surviving or transferee corporation
or any parent (within the meaning of Rule 12b-2 under the Exchange
Act) thereof, and (B) the incumbent members of the Board of
Directors of Resources as constituted immediately prior thereto
shall constitute at least a majority of the directors of the
continuing, surviving or transferee corporation and any parent
thereof; or
(5) the Board of Directors of Resources adopts a resolution to the
effect that a "Change in Control" has occurred or is anticipated
to occur.
(f) "CHANGE IN CONTROL PARTICIPANT" means the following:
(1) a Participant whose Termination of Employment occurs after a
Change in Control and within 36 months after the month in which
the Change in Control occurs, unless such Termination of
Employment is (A) by PP&L or an Affiliated Company for Cause, (B)
by reason of the Participant's death, Disability or Retirement, or
(C) by the Participant without Good Reason, or
(2) a Participant whose Termination of Employment occurs prior to a
Change in Control (whether or not a Change in Control ever occurs)
(A) at the request or direction of a
Person who has entered into an agreement with Resources the
consummation of which would constitute a Change in Control, or (B)
at the Participant's initiative for Good Reason if the
circumstance or event which constitutes Good Reason occurs at the
direction of such Person or (C) the Participant's Termination of
Employment is by PP&L or an Affiliated Company without Cause or is
by the Participant for Good Reason, and such Termination of
Employment or the circumstance or event which constitutes Good
Reason is otherwise in connection with or in anticipation of a
Change in Control (whether or not a Change in Control occurs). For
purposes of any determination regarding the applicability of the
immediately preceding sentence, any position taken by the
Participant shall be presumed to be correct unless PP&L
establishes to the Board by clear and convincing evidence that
such position is not correct.
(g) "DISABILITY" shall be deemed the reason for a Participant's
Termination of Employment by PP&L or an Affiliated Company, if, (1) as
a result of the Participant's incapacity due to physical or mental
illness, the Participant shall have been absent from the full-time
performance of the Participant's duties with PP&L and all Affiliated
Companies for a period of six consecutive months, and (2), if
applicable, PP&L shall have given the Participant any "Notice of
Termination for Disability" required by any severance agreement
between the Participant and PP&L or an Affiliated Company, and, within
thirty days after such "Notice of Termination," if any, is given, the
Participant shall not have returned to the full-time performance of
the Participant's duties.
(h) "DISPLACED PARTICIPANT" means a Participant who has a Termination of
Employment after completing one or more Years of Vesting Service, and
who qualifies for benefits pursuant to PP&L's Displaced Managers
Policy (SPM 606).
(i) "EARLY RETIREMENT REDUCTION FACTOR" means the percentage that appears
adjacent to the Participant's age below determined under the
appropriate column.
(1) Column (1) shall apply to any Retiree.
(2) Column (2) shall apply to any Terminated Vested Participant.
(3) Column (3) shall apply to any Change in Control Participant.
Notwithstanding anything in this Section to the contrary, a
Participant who meets the definition of a Retiree, a Terminated
Vested Participant and/or a Displaced Participant, who also meets
the definition of a Change in Control Participant, shall be
treated as a Change in Control Participant for purposes of this
Section.
(4) Column (4) shall apply to any Displaced Participant.
Notwithstanding Subsection (1) or (2), a Participant who meets the
definition of a Retiree or a Terminated Vested Participant, but
not the definition of a Change in Control Participant, who also
meets the definition of a Displaced Participant, shall be
treated as a Displaced Participant for purposes of this Section.
Percentage of Benefit Received
------------------------------
(1) (2) (3) (4)
Age When Change in
Benefits Terminated Control Displaced
Start Retiree Vested Participant Participant
- ---------------------- ------- ---------- --- -----------
60 100 100 100 100
59 95 90 95 100
58 90 80 90 100
57 85 70 85 100
56 80 60 80 100
55 75 50 75 100
54 70 N/A 70 100
53 65 N/A 65 100
52 60 N/A 60 100
51 55 N/A 55 100
50 50 N/A 50 100
49 or younger N/A N/A N/A N/A
(j) "EBPB" means the Employee Benefit Plan Board, the members of which are
appointed by the Board.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
(I) "Good Reason" for Termination of Employment by a Participant means the
occurrence (without the Participant's express written consent) after a
Change in Control, or prior to a Change in Control under the
circumstances described in paragraphs (B) and (C) of Section (2) of
the definition of "Change in Control Participant" (treating all
references in paragraphs (1) through (7) below to a "Change in
Control" as references to a "Potential Change in Control"), of any one
of the following acts by PP&L or an Affiliated Company, or failures by
PP&L or an Affiliated Company to act:
(1) the assignment to the Participant of any duties inconsistent with
the Participant's status as an executive officer or key employee
of PP&L or a substantial adverse alteration in the nature or
status of the Participant's responsibilities from those in effect
immediately prior to a Change in Control;
(2) a reduction by PP&L or an Affiliated Company of the Participant's
annual base salary as in effect on the effective date of this
amended and restated Plan, or as the same may be increased from
time to time, except for across-the-board decreases uniformly
affecting management, key employees and salaried employees of PP&L
or the Affiliated Company, or the business unit in which
Participant is then employed,
(3) the relocation of the Participant's principal work location to a
location more than 30 miles from the vicinity of such work
location immediately prior to a Change in Control or PP&L's or an
Affiliated Company's requiring the Participant to be based
anywhere other than such principal place of employment (or
permitted relocation thereof) except
for required travel on PP&L's or an Affiliated Company's business
to an extent substantially consistent with the Participant's
present business travel obligations;
(4) the failure by PP&L or an Affiliated Company to pay to the
Participant any portion of the Participant's current compensation
or to pay to the Participant any portion of an installment of
deferred compensation under any deferred compensation program of
PP&L or an Affiliated Company, within seven days of the date such
compensation is due, except for across-the-board compensation
deferrals uniformly affecting management, key employees and
salaried employees of PP&L or the Affiliated Company, or the
business unit in which Participant is then employed;
(5) the failure by PP&L or an Affiliated Company to continue in effect
any compensation or benefit plan in which the Participant
participates immediately prior to a Change in Control which is
material to the Participant's total compensation, or any
substitute plans adopted prior to a Change in Control, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the
failure by PP&L or an Affiliated Company to continue the
Participant's participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both
in terms of the amount or timing of payment of benefits provided
and the level of the Participant's participation relative to other
participants, as existed immediately prior to the Change in
Control, or
(6) the failure by PP&L or an Affiliated Company to continue to
provide the Participant with benefits substantially similar to
those enjoyed by the Participant under any of PP&L's pension,
savings, life insurance, medical, health and accident, or
disability plans in which the Participant was participating
immediately prior to a Change in Control, except for across-the-
board changes to any such plans uniformly affecting all
participants in such plans, the taking of any other action by PP&L
or an Affiliated Company which would directly or indirectly
materially reduce any of such benefits or deprive the Participant
of any material fringe benefit enjoyed by the Participant at the
time of the Change in Control, or the failure by PP&L or an
Affiliated Company to provide the Participant with the number of
paid vacation days to which the Participant is entitled on the
basis of years of service with PP&L or an Affiliated Company in
accordance with PP&L's normal vacation policy at the time of the
Change in Control; or
(7) any purported termination of the Participant's employment which is
not effected pursuant to any "Notice of Termination" required by
any severance agreement between the Participant and PP&L or an
Affiliated Company.
The Participant's right to terminate his or her employment with
PP&L for Good Reason shall not be affected by the Participant's
incapacity due to physical or mental illness. The Participant's
continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or failure to act constituting
Good Reason hereunder.
For purposes of any determination regarding the existence of Good
Reason, any claim by the Participant that Good Reason exists shall
be presumed correct unless
PP&L establishes to the Board by clear and convincing evidence
that Good Reason does exist.
(m) "OFFICERS DEFERRED COMPENSATION PLAN" means the PP&L Officers Deferred
Compensation Plan, as amended from time to time.
(n) "PARTICIPANT" means an eligible officer or former officer of PP&L
entitled to receive benefits under Article 3 of this Plan.
(o) "PERSON" shall have the meaning given in section 3(a)(9) of the
Exchange Act, as modified and used in sections 13(d) and 14(d)
thereof, however, a Person shall not include (1) Resources or any of
its subsidiaries, (2) a trustee or other fiduciary holding securities
under an employee benefit plan of Resources or any of its
subsidiaries, (3) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (4) a corporation
owned, directly or indirectly, by the shareowners of Resources in
substantially the same proportions as their ownership of stock of
Resources.
(p) "PLAN" means this Supplemental Executive Retirement Plan, as amended
from time to time.
(q) "POTENTIAL CHANGE IN CONTROL" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have
been satisfied:
(1) Resources enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(2) any Person publicly announces an intention to take or to consider
taking actions which if consummated would constitute a Change in
Control;
(3) any Person is or becomes the beneficial owner (within the meaning
of Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Resources representing 5% or more of the combined
voting power of Resources' then outstanding securities entitled to
vote generally in the election of directors; or
(4) the Board of Resources adopts a resolution to the effect that, for
purposes of this Plan, a Potential Change in Control has occurred.
(r) "PP&L" means PP&L, Inc.
(s) "Prior Plan" means any defined benefit plan, as defined in section
3(35) of the Employee Retirement Income Security Act of 1974, as
amended, which at any time satisfies the applicable requirements of
section 401 (a) of the Internal Revenue Code of 1986, as amended,
provided that (1) such plan has a sponsor other than PP&L, and (2)
Participant was a participant in such plan prior to employment with
PP&L.
(t) "Projected Years of Service" means the number of full or partial
twelve-month periods beginning on the date on which Participant
attains the age of 30 and ending on the date Participant ceases to be
employed by PP&L.
(u) "Resources" shall mean PP&L Resources, Inc.
(v) "Retiree" means a Participant who has a Termination of Employment
after:
(1) attaining age 55 and completing at least 10 Years of Service, or
(2) attaining age 60, or
(3) attaining age 50, completing at least 10 Years of Service, and
whom the Compensation and Corporate Governance Committee of the
Board, in its sole discretion, determines is entitled to an
immediately payable SERB.
(w) "Retirement" shall be deemed the reason for a Participant's
Termination of Employment if such employment is terminated in
accordance with PP&L's retirement policy, including early retirement,
generally appliG6619 to its salaried employees.
(x) "Retirement Plan" means the PP&L Retirement Plan, as amended from time
to time.
(y) "SERB" means the Supplemental Executive Retirement Benefit payable
under this Plan calculated under Article 4.
(z) "Supplemental Final Average Earnings" means the following:
(1) Supplemental Final Average Earnings means twelve times the average
of a Participant's "compensation" as defined in Paragraphs (A)
through (C) below, from PP&L and/or an Affiliated Company, for the
60 full consecutive months in the final 120 (or fewer) full
consecutive months during which he is employed by PP&L and/or an
Affiliated Company. For this purpose, non-consecutive months
interrupted by periods in which the Participant receives no
"compensation" shall be treated as consecutive. For purposes of
this Section, "compensation" shall include the following:
(A) the Participant's base salary from PP&L and/or any Affiliated
Company prior to any deferrals to the Officers Deferred
Compensation Plan or any other nonqualified deferred
compensation plan of an Affiliated Company or any Internal
Revenue Code section 401(k) plan by which Participant is
covered, plus
(B) the value of any cash grants attributable to any month used in
the average, awarded to Participant pursuant to the executive
incentive awards program initially approved by the Board on
October 25, 1989 or any similar program maintained by an
Affiliated Company, plus
(C) with respect only to Participants who were officers in
positions in PP&L Salary Groups I through IV on December 31,
1997, the value of any Restricted Stock (including any
dividends distributed on Restricted Stock during the
Restriction Period) granted to Participant under the Incentive
Compensation Plan attributable to any month prior to the dates
set forth in (1) and (11) below.
(I) For purposes of the benefit formula in Subsection
4(b)(1), each month prior to January 1, 1998.
(II) For purposes of the benefit formula in Subsection
4(b)(2), each month prior to January 1, 2002.
(2) For the purposes of determining the Participant's "compensation"
under Subsection (1) of this definition, the EBP13 will determine:
(A) the value of any Restricted Stock under the Incentive
Compensation Plan as of the Restricted Stock's Date of Grant
(as defined by the Incentive Compensation Plan) and prorate
such value over the year for which the Restricted Stock was
granted;
(B) the amount of any dividends distributed on Restricted Stock
during the Restriction Period and prorate such amount over the
period for which such dividends are paid; and
(C) the amount of any cash grant awarded under the Participant
incentive awards program and prorate such amount over the year
for which the award was granted.
(3) The Supplemental Final Average Earnings of a Displaced Participant
who has less than 60 full consecutive months of employment shall
be a reduced amount, equal to the difference of (A) minus (B),
below.
(A) (I) His total earnings as determined under Subsection (1) of
this definition for his entire period of employment with
PP&L and Affiliated Companies, divided by
(II) the number of years the Participant was employed by PP&L
and Affiliated Companies, including any fraction of a full
year thereof, calculated by dividing the total number of
full consecutive months of employment by 12.
(B) (I) The amount determined in Paragraph (3)(A) immediately
above, multiplied by
(II) the Reduction Factor in Appendix A which corresponds with
the Participant's total number of full consecutive months
of employment with PP&L and Affiliated Companies.
(aa) "Terminated Vested Participant" means a Participant:
(1) who has a Termination of Employment after attaining age 50 but not
age 55, and completing at least 10 Years of Service, and
(2) whom the Board, in its sole discretion, does not determine is
entitled to an immediately payable SERB.
(bb) "Termination of Employment" means the Participant's termination of
employment with PP&L and all Affiliated Companies.
(cc) "Years of Service" means the number of full and partial years used to
calculate Participant's accrued benefit under the Retirement Plan, but
(1) excluding years prior to Participant's attainment of age 30, and
(2) including service with any Affiliated Company prior to the
Participant's becoming an officer of PP&L, provided such service would
otherwise be counted under the Retirement Plan, but excluding any such
service with an Affiliated Company performed before the Affiliated
Company became an Affiliated Company.
(dd) "Year(s) of Vesting Service" means the number of full years used to
calculate Participant's vested interest in his accrued benefit under
the Retirement Plan, but excluding any such service with an Affiliated
Company performed before the Affiliated Company became an Affiliated
Company.
3. ENTITLEMENT TO BENEFITS.
(a) Any officer of PP&L who is in a position in PP&L Salary Group I
through IV immediately prior to his Termination of Employment or the
date of his transfer to an Affiliated Company shall be entitled to a
SERB benefit if and only if he is either:
(1) a Retiree,
(2) a Terminated Vested Participant,
(3) a Change in Control Participant, or
(4) a Displaced Participant.
(b) Notwithstanding Section 3(a), any officer of PP&L who is in a position
in PP&L Salary Group I through IV immediately prior to his Termination
of Employment or the date of his transfer to an Affiliated Company and
who terminates employment with PP&L on account of his death shall be
entitled to the death benefit in Article 7 in lieu of any other
benefit under the Plan.
(c) Notwithstanding Section 3(a) or (b), any Participant otherwise
eligible for benefits shall forfeit any and all benefits under the
Plan if such Participant's Termination of Employment is by PP&L or an
Affiliated Company for Cause.
(d) All officers who are eligible for benefits under Section 3(a) and who
are entitled to annual benefits of at least $44,000 in the aggregate
from all PP&L and Affiliated Company-sponsored pension, profit-
sharing, savings or deferred compensation plans, shall terminate their
employment with PP&L and all Affiliated Companies no later than the
first day of the month following attainment of age 65, unless PP&L or
Affiliated Company requests that employment be extended for up to one
year. In such event, Participant must retire at the end of the
extension, unless PP&L or Affiliated Company requests additional
extensions, at the end of which Participant must retire. Any
Participant requested to serve beyond the mandatory retirement date
may decline to do so without affecting his benefit status under this
Plan or any other PP&L or Affiliated Company benefit program. Failure
to accept benefits provided for in this Plan shall not affect the
requirements of this paragraph.
4. AMOUNT OF SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFIT.
(a) A Participant entitled to benefits under Article 3 will be paid a SERB
equal to an annual amount payable for the life of Participant
calculated pursuant to Sections (b) through (f) below:
(b) The amount calculated under Subsection (1) and/or (2), as appropriate:
(1) The sum of (A) plus (B)-.
(A) 2.0% of Participant's Supplemental Final Average Earnings
times his Years of Service up to 20, plus
(B) 1.5% of Participant's Supplemental Final Average Earnings
times his Years of Service in excess of 20 but not in excess
of 30.
(2) With respect only to Participants who were officers in positions
in PP&L Salary Groups I through IV on December 31, 1997:
(A) the benefit determined under Subsection (4)(b)(1) shall (1)
be calculated using Projected Years of Service instead of
Years of Service, and (11) be reduced by the annual amount
payable to Participant from a Prior Plan;
(B) such Participant's SERB shall not be less than the greater
of (1) or (11) below:
(I) (i) 2.7% of Participant's Supplemental Final Average
Earnings calculated as of the earlier of December 31,
2001 or the date Participant terminates employment
times his Years of Service up to 20, plus (ii) 1.0% of
Participant's Supplemental Final Average Earnings
calculated as of the earlier of December 31, 2001 or
the date Participant terminates employment, times his
Years of Service in excess of 20 but not more than 30
less (iii) the annual amount payable as the maximum
primary Social Security benefit payable to an
individual aged 65 in the year of Participant's
retirement whether or not received by Participant.
(II) (i) 2.7% of Participant's Supplemental Final Average
Earnings calculated as of the earlier of December 31,
2001 or the date Participant terminates employment,
times his Projected Years of Service up to 20, plus
(ii) 1.0% of Participant's Supplemental Final Average
Earnings calculated as of the earlier of December 31,
2001 or the date Participant terminates employment,
times his Projected Years of Service in excess of 20
but not more than 30, less (iii) the annual amount
payable to Participant from a Prior Plan, less (iv) the
annual amount payable as the maximum primary Social
Security benefit payable to an individual aged 65 in
the year of Participant's retirement whether or not
received by Participant
(c) The amount calculated under Section (b) shall be multiplied by the
applicable Early Retirement Reduction Factor,
(d) With respect to all Participants, the amount calculated under Sections
(b) and (c) shall be reduced by the following amounts, to the extent
such amounts are accrued during periods for which the Participant is
credited with Years of Service or Projected Years of Service under
this Plan:
(1) The Participant's vested accrued benefit under the Retirement
Plan (but not including any temporary supplemental amounts
payable under Section 5.3(b) of the Retirement Plan), (A)
expressed as a single life annuity, and (B) expressed as a
benefit payable at the same time as Participant's SERB, except
that in the event Participant commences benefits under this Plan
prior to commencing benefits under the Retirement Plan, the
reduction will be made as if Participant had commenced benefits
under the Retirement Plan at the later of age 55 or commencement
of benefits under this Plan, based on the ea0y retirement
factors, and interest and mortality assumptions used in the
Retirement Plan. The amount of the reduction will not thereafter
be changed upon Participant's actual commencement of benefits
under the Retirement Plan.
For purposes of this Subsection (d)(1), the term "Retirement
Plan" shall include any successor plan.
(2) Supplemental payments to Participant under section 7(a) of the
Officers Deferred Compensation Plan as if Participant had chosen
a single life annuity under such Plan payable at the same time as
Participant's SERB.
(3) The Participant's vested accrued benefit under any other
nonqualified defined benefit plan maintained by PP&L, expressed
as a single life annuity payable at the same time as
Participant's SERB, based on the early retirement factors and
interest and mortality rates used in such plan.
(e) With respect to those Participants who have service with an Affiliated
Company,
(1) The amount calculated under Sections (b), (c) and (d) shall be
reduced by the following:
(A) The participant's vested accrued benefit under the Pension
Plan for Employees of Penn Fuel Gas, Inc. and North Penn Gas
Company, and/or the Pennsylvania Mines Corporation
Retirement Plan, determined as follows:
(I) to the extent accrued during periods for which the
Participant is credited with Years of Service or
Projected Years of Service under this Plan, and
(II) expressed as a single life annuity, and
(III) expressed as a benefit payable at the same time as
Participant's SERB, except that in the event
Participant commences benefits under
this Plan prior to commencing benefits under such other
plan, the reduction will be made as if Participant had
commenced benefits under such other plan at the later
of such plan's earliest retirement age or commencement
of benefits under this Plan. The amount of the
reduction will not thereafter be changed upon
Participant's actual commencement of benefits under
such plan, and
(IV) based on the early retirement factors and interest and
mortality rates used in such other plan.
(B) The Participant's vested account under the PP&L Resources
Subsidiary Savings Plan and the H.T. Lyons, Inc. 401(k) Plan, and
their successors, determined as follows:
(I) based on contributions other than the Participant's own
elective deferrals or employee contributions and
earnings thereon.
(II) to the extent attributable to contributions made during
periods for which these Participant is credited with
Years of Service or Projected Years of Service under
this Plan,
(III) such account valued as of the date Participant's SERB
benefit commences to be paid, but including any amounts
distributed to or on behalf of Participant,
(IV) such account converted to a benefit expressed as a
single life annuity for Participant's lifetime,
commencing at the same time as Participant's SERB,
based on the 30-year U.S. Treasury bond rate as of the
month preceding the month SERB payments commence, and
the 1983 Group Annuity Mortality Table (unisex):
(C) The Participant's employer-derived benefit under any taxqualified
plan not listed in Paragraph (A) or (B) of this Subsection
5(e)(1) of an Affiliated Company who becomes an Affiliated
Company after the effective date of this amended and restated
Plan, to the extent that such plan is the primary tax-qualified
retirement plan of such Affiliated Company, and such benefit is
based on service counted under this Plan. If such plan is a
defined benefit plan, the offset shall be calculated in a manner
similar to that described in Paragraph (A) of this Subsection
5(e)(1). If such plan is a defined contribution plan, the offset
shall be calculated in a manner similar to that described in
Paragraph (B) of this Subsection 5(e)(1).
(D) The Participant's vested accrued benefit under any nonqualified
defined benefit plan maintained by an Affiliated Company that was
accrued prior to becoming an employee of PP&L, expressed as a
single life annuity payable at the same time as Participant's
SERB.
(2) The best data available will be used to determine the amounts to
be offset under this Section (e). The EBPB has the absolute,
discretionary power to make reasonable approximations and
estimates to determine the value and amount of such offset
amounts, applied uniformly to all similarly situated
Participants.. If reasonable approximations and estimates of such
amounts are necessary, the EBPB will so inform the Participant. A
Participant may elect to have his SERB calculated without regard
to the offsets described in this Section (e) with respect to
contributions made to such plans and/or benefits accrued under
such plans prior to the date the Participant first becomes
employed by PP&L, in which case his Years of Service and
Projected Years of Service shall not include service before the
date the Participant W becomes employed by PP&L.
(3) The amount calculated under Section (b) of this Article with
respect to a Participant who has ceased to be an officer of PP&L
by reason of a transfer to an Affiliated Company shall be
calculated on the basis of his Years of Service and/or Projected
Years of Service as of the date of his transfer, and on the basis
of his Supplemental Final Average Earnings and his Years of
Vesting Service as of the date of his Termination of Employment.
(f) In the event that a Participant's benefits under any plan to which
Section (d) or (e) of this Article refers or under a Prior Plan are
subject in whole or in part to a domestic relations order, SERB
payments shall be calculated and paid without regard to such order.
5. TIME OF PAYMENT.
A Participant who is eligible for benefits under Article 3 shall start
receiving SERB payments on the date set forth below.
(a) A Retiree shall receive benefits as soon as administratively
practicable following his Termination of Employment.
(b) A Terminated Vested Participant shall receive benefits as follows:
(1) If he has elected a single sum form of benefit under Article 6,
such single sum shall be paid as soon as administratively
practicable following his Termination of Employment.
(2) If he has elected an annuity form of benefit under Article 6,
such annuity form shall start to be paid as soon as
administratively practicable following his attainment of age 55;
provided that if he also meets the definition of a Change in
Control Participant or a Displaced Participant, such annuity form
shall start to be paid as soon as administratively practicable
following the later of age 50 or his Termination of Employment.
(c) A Change in Control Participant or a Displaced Participant shall
receive benefits as follows:
(1) If he has elected a single sum form of benefit under Article 6,
such single sum shall be paid as soon as administratively
practicable following his Termination of Employment
(2) If he has elected an annuity form of benefit under Article 6,
such annuity form shall start to be paid as soon as
adminisbvffive4y practicable following the later of his
attainment of age 50 or his Termination of Employment.
(d) In the event that Resources disputes to its shareowners as a dividend
a sufficient number of shares of PP&L or an Affiliated Company, on a
pro rata basis, in accordance with their Resources equity ownership,
or in the event of the sale of up to 25% of the securities of PP&L or
an Affiliated Company in an initial public offering of securities
registered under the Securities Act of 1933, such distribution or sale
of shares resulting in a Spin-Off Company (the "Spun-Off Company"),
with the effect that the Spun-Off Company no longer meets the
definition of PP&L or an Affiliated Company, and in connection with
such distribution or sale, a Participant becomes an employee of the
Spun-Off Company, the payment of any SERB to which Participant (or his
beneficiary) is entitled under the Plan shall be made or shall
commence to be made no earlier than at such time as the Participant
(or his beneficiary) is eligible to commence to receive to a
distribution (either immediate or deferred) under the Retirement Plan
or any successor plan.
6. METHOD OF PAYMENT.
(a) A Participant who is eligible to receive benefits under the Retirement
Plan and who elects to receive such benefits at the time SERB payments
begin may elect to have his SERB paid in one of the following forms of
benefit, each of which shall be the Actuarial Equivalent of his SERB
benefit:
(1) the form of annuity payment in which his Retirement Plan benefits
are to be paid, (provided, however, if any monthly payment would
be 100 dollars or less, the EBPB, in its discretion, may elect to
make such payments in such installments as the EBPB may determine
or in a single sum payment), or
(2) a single sum
(b) A Participant who is not eligible to receive benefits under the
Retirement Plan or who has elected not to receive such benefits under
the Retirement Plan at the time SERB payments begin, may elect one of
the following forms of benefit, which shall be the Actuarial
Equivalent of his SERB benefit, provided, however, that if he elects
an annuity form under Paragraph (1), (2) or (3) below, and if any
monthly payment would be 100 dollars or less, the EBPB, in its
discretion, may elect to make such payments in such installments as
the EBPB may determine, or in a single sum payment:
(1) a single life annuity with equal monthly installments payable to
the Participant for his lifetime; or
(2) a joint and survivor annuity with the Participant's designated
beneficiary, payable in monthly installments to the Participant
for his lifetime and with a specified percentage of the amount of
such monthly installment payable after the death of the
Participant to the designated beneficiary of such Participant, if
then living, for the life of such designated beneficiary; or
(3) a single life annuity payable in equal monthly installments to
the Participant for his lifetime, with 60, 120 or 180 monthly
payments guaranteed, or
(4) a single sum.
(c) A Participant may elect a form of benefit hereunder by filing written
notice with the EBPB at anytime at least 12 months prior to the first
day of the calendar month for which a SERB is first payable to
Participant. If a Participant described in Section (a) of this Article
fails to elect a form of benefit within the prescribed time period,
the benefit shall be paid in the form in which such Participant's
Retirement Plan benefits are paid. If a Participant described in
Section (b) of this Article fails to elect a form of benefit within
this time period, the benefit shall be paid in the form of a single-
life annuity if the Participant does not have a spouse on the date of
benefit commencement and in the form of a 50% joint and survivor
annuity with Participant's spouse as the beneficiary if the
Participant has a spouse on the date of benefit commencement.
7. Death Benefit. If a pre-retirement spouse's annuity is payable under the
Retirement Plan on account of Participant's death, the Participant's
surviving spouse will be paid a supplemental spouse's annuity based on the
SERB and made in accordance with all the terms and conditions applicable to
such preretirement spouse's annuities under the Retirement Plan.
8. ADMINISTRATION. The EBPB shall have the discretionary authority and final
right to interpret, construe and make benefit determinations (including
eligibility and amount) under the Plan. The decisions of the EBPB are final
and conclusive for all purposes. If one or more members of the EBPB are
disqualified by personal interest from taking part in a particular
decision, the remaining member or members of the EBPB (although less than a
quorum) shall have full authority to act on the matter.
9. MISCELLANEOUS.
(a) If any person to receive payment is a minor, or is deemed by the EBPB
or is adjudged to be legally incompetent, the payments shall be made
to the duly appointed guardian or committee of such minor or
incompetent, or they may be made to such person or persons who the
EBPB believes are caring for or supporting such minor or incompetent.
(b) All payments to persons entitled to benefits under this Plan shall be
made to such persons and shall not be grantable, transferable or
otherwise assignable in anticipation of payment thereof, in whole or
in part, by the voluntary or involuntary acts of any such persons, or
by operation of law, and shall not be liable or taken for any
obligation of such person. PP&L will observe the terms of the Plan
unless and until ordered to do otherwise by a state or Federal court.
As a condition of participation, Participant agrees to hold PP&L
harmless from any claim that arises out of PP&L's obeying any such
order whether such order effects a judgment of such court or is issued
to enforce a judgment or order of another court.
(c) Nothing in this Plan shall confer any right on any Participant to
continue in PP&L's employ or to receive compensation, nor shall
anything in this Plan affect in any way the right of PP&L to terminate
any Participant's employment at any time.
(d) The expenses of administration hereunder shall be borne by PP&L.
(e) This Plan shall be construed, administered and enforced according to
the laws of the Commonwealth of Pennsylvania.
(f) All payments from this Plan shall be made from the general assets of
PP&L. This Plan shall not require PP&L to set aside, segregate,
earmark, pay into trust or special account or otherwise restrict the
use of its assets in the operation of the business. Participant shall
have no greater right or status than as an unsecured creditor of PP&L
with respect to any amounts owed to Participant hereunder.
(g) The masculine pronoun shall be deemed to include the feminine and the
singular to include the plural unless a different meaning is plainly
required by the context.
10. TERMINATION OR AMENDMENT. The Board may, in its sole discretion, terminate
and amend this Plan from time to time provided, however, that the Plan may
not be terminated or amended to the prejudice or detriment of any
Participant during the three (3) year period immediately following a Change
in Control (or, if later, thirty six (36) months from the consummation of
the transaction giving rise to the Change in Control). Without limiting the
generality of the foregoing, the proviso of the preceding sentence shall
not, at any time or in any event, be amended or deleted. Subject to the
foregoing, the EBPB may make such amendments to the Plan as it deems
necessary or desirable except those amendments which substantially increase
the cost of the Plan to PP&L or significantly alter the benefit design or
eligibility requirements of the Plan. No termination or amendment shall
(without Participant's consent) alter Participant's right to monthly
payments which have commenced prior to the effective date of such
termination or amendment. Prior to a Change in Control, the Board
specifically reserves the right to terminate or amend this Plan to
eliminate the right of any Participant to receive payment hereunder prior
to the time when payments are in pay status under this Plan.
Notwithstanding the foregoing, if PP&L is liquidated, the EBPB shall cause
the amounts due hereunder to be paid in one or more installments or upon
such other terms and conditions and at such other time as the EBPB
determines to be just and equitable, but in no event later than the time
such amounts would otherwise have been paid.
11. Effective Date. The original effective date of this Plan is July 1, 1985.
The effective date of this amended and restated Plan is January 1, 1998.
Executed this ____ day of July, 1998.
PP&L, INC.
By:
-----------------------
John M. Chappelear
Vice President-Investments Pensions
APPENDIX A
# of Full Consecutive # of Full Consecutive
Months of Employment Reduction Factor (%) Months of Employment Reduction Factor
60 0.0000 36 15.0000
59 0.4167 35 16.2500
58 0.8333 34 17.5000
57 1.2500 33 18.7500
56 1.6667 32 20.0000
55 2.0833 31 21.2500
54 2.5000 30 22.5000
53 2.9167 29 23.7500
52 3.3333 28 25.0000
51 3.7500 27 26.2500
50 4.1667 26 27.5000
49 4.5833 25 28.7500
48 5.0000 24 30.0000
47 5.8333 23 31.6667
46 6.6667 22 33.3333
45 7.5000 21 35.0000
44 8.3333 20 36.6667
43 9.1667 19 38.3333
42 10.0000 18 40.0000
41 10.8333 17 41.6667
40 11.6667 16 43.3333
39 12.5000 15 45.0000
38 13.3333 14 46.6667
37 14.1667 13 48.3333