MIDAMERICAN ENERGY HOLDINGS COMPANY
EXECUTIVE VOLUNTARY DEFERRED COMPENSATION PLAN
PLAN DOCUMENT
MIDAMERICAN ENERGY HOLDINGS COMPANY
EXECUTIVE VOLUNTARY DEFERRED COMPENSATION PLAN
ARTICLE I - PURPOSE; EFFECTIVE DATE
1.1. PURPOSE. The purpose of this Executive Voluntary Deferred Compensation
Plan (hereinafter, the "Plan") is to permit a select group of management
and highly compensated employees of MidAmerican Energy Holdings Company
and its subsidiaries to defer the receipt of income which would otherwise
become payable to them. It is intended that this Plan, by providing this
deferral opportunity, will assist the in retaining and attracting
individuals of exceptional ability by providing them with these benefits.
1.2. EFFECTIVE DATE. The Plan shall be effective as of July 1, 1999.
ARTICLE II - DEFINITIONS
For the purpose of this Plan, the following terms shall have the meanings
indicated, unless the context clearly indicates otherwise:
2.1. ACCOUNT(S). "Account(s)" means the account or accounts maintained on the
books of the Company used solely to calculate the amount payable to each
Participant under this Plan and shall not constitute a separate fund of
assets. The Accounts available for each Participant shall be identified as:
a) Retirement Account;
b) In-Service Account; and,
c) Education Account.
2.2. ACTUARIAL EQUIVALENT. "Actuarial Equivalent" means an equivalence in value
between two (2) or more forms and/or times of payment based on a
determination by an actuary chosen by the Company, using sound actuarial
assumptions at the time of such determination, and may be modified from
time to time consistent with sound actuarial assumptions at that time.
2.3. BENEFICIARY. "Beneficiary" means the person, persons or entity as
designated by the Participant, entitled under Article VI to receive any
Plan benefits payable after the Participant's death.
2.4. BOARD. "Board" means the Board of Directors of the Company.
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2.5. CHANGE IN CONTROL. "Change in Control" means (i) approval by the Company's
stockholders of
(a) the dissolution of the Company,
(b) a merger or consolidation of the Company where the Company is not the
surviving corporation, except for a transaction the principal purpose
of which is to change the state in which the Company is incorporated,
(c) a reverse merger in which the Company survives as an entity but in
which securities possessing more than 50 percent of the total combined
voting power of the Company's securities are transferred to a person
or persons different from those who hold such securities immediately
prior to the merger or
(d) the sale or other disposition of all or substantially all of the
Company's assets;
(ii) the direct or indirect acquisition by any Person or related group
of Persons (other than an acquisition from or by the Company or
by a Company-sponsored employee benefit plan or by a Person that
directly or indirectly controls, is controlled by, or is under
common control with, the Company) of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities Exchange Act of 1934,
as amended) of securities possessing more than 50 percent of the
total combined voting power of the Company's outstanding voting
securities; or
(iii)a change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the Board
members cease, by reason of one or more contested elections for
board membership or by one or more actions by written consent of
stockholders, to be comprised of individuals who either (a) have
been Board members continuously since the beginning of such
period or (b) have been elected or nominated for election as
Board members during such period by at least a majority of the
Board members described in clause (a) who were still in office at
the time such election or nomination was approved by the Board.
2.6. COMMITTEE. "Committee" means the Committee appointed by the Board to
administer the Plan pursuant to Article VII.
2.7. COMPANY. "Company" means MidAmerican Energy Holdings Company, a Des Moines,
Iowa based corporation, and any directly or indirectly affiliated
subsidiary corporations, any other affiliate designated by the Board, or
any successor to the business thereof. For purposes of this Plan,
MidAmerican Energy Holdings Company, and each subsidiary, affiliate and
successor shall be treated as the Company with respect to its employees
only.
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2.8. COMPENSATION. "Compensation" means the base salary payable to and bonus or
incentive compensation earned by a Participant with respect to employment
services performed for the Company by the Participant and considered to be
"wages" for purposes of federal income tax withholding. For purposes of
this Plan only, Compensation shall be calculated before reduction for any
amounts deferred by the Participant pursuant to the Company's tax qualified
plans which may be maintained under Section 401(k) or Section 125 of the
Internal Revenue Code of 1986, as amended, (the "Code"), or pursuant to
this Plan or any other non-qualified plan which permits the voluntary
deferral of compensation. Inclusion of any other forms of compensation is
subject to Committee Approval.
2.9. DEFERRAL COMMITMENT. "Deferral Commitment" means a commitment made by a
Participant to defer a portion of Compensation as set forth in Article III.
The Deferral Commitment shall apply to each payment of salary and/or bonus
payable to a Participant, and shall specify the Account or Accounts to
which the Compensation deferred shall be allocated. Such allocation shall
be made in whole percentages and shall be made in a form acceptable to the
Committee.
A Deferral Commitment shall remain in effect until amended or revoked as
provided under Section 3.2 (b), below.
2.10.DEFERRAL PERIOD. "Deferral Period" means each calendar year, except that
the initial Deferral Period shall be July 1, 1999 through and including
December 31, 1999.
2.11.DETERMINATION DATE. "Determination Date" means the last day of each
calendar month.
2.12.DISABILITY. "Disability" means a physical or mental condition that
prevents the Participant from satisfactorily performing the Participant's
usual duties for Company. The Committee shall determine the existence of
Disability, in its sole discretion, and may rely on advice from a medical
examiner satisfactory to the Committee in making the determination.
2.13.DISCRETIONARY CONTRIBUTION. "Discretionary Contribution" means the Company
contribution credited to a Participant's Account(s) under Section 4.4,
below.
2.14.EARNINGS. "Earnings" means the amount credited to a Participant's
Account(s) on each Determination Date, which shall be based on the
Valuation Funds chosen by the Participant as provided in Section 2.21,
below and in a manner consistent with Section 4.3, below. Such credits to a
Participant's Account may be either positive or negative to reflect the
increase or decrease in value of the Account in accordance with the
provisions of this Plan.
2.15.FINANCIAL HARDSHIP. "Financial Hardship" means a severe financial hardship
of the Participant resulting from a sudden and unexpected illness or
accident of the Participant or of a dependent of the Participant, loss of
the Participant's property due to casualty, or other similar extraordinary
and unforeseeable circumstance arising as a result of events beyond the
control of the Participant. Financial Hardship shall be determined based
upon such standards as are, from time to time, established by the
Committee, and such determination shall be in the sole discretion of the
Committee.
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2.16.FORM OF PAYMENT DESIGNATION. "Form of Payment Designation" means the form
prescribed by the Committee and completed by the Participant, indicating
the chosen form of payment for benefits payable from each Account under
this Plan, as elected by the Participant.
2.17.401(K) PLAN. "401(k) Plan" means the MidAmerican Energy Company Retirement
Savings Plan, or any other successor defined contribution plan maintained
by the Company that qualifies under Section 401(a) of the Code and
satisfies the requirements of Section 401(k) of the Code.
2.18.PARTICIPANT. "Participant" means any employee who is eligible, pursuant to
Section 3.1, below, to participate in this Plan, and who has elected to
defer Compensation under this Plan in accordance with Article III, below.
Such employee shall remain a Participant in this Plan for the period of
deferral and until such time as all benefits payable under this Plan have
been paid in accordance with the provisions hereof.
2.19.PLAN. "Plan" means the MidAmerican Energy Holdings Company Executive
Voluntary Deferred Compensation Plan as amended from time to time.
2.20.RETIREMENT. "Retirement" means the termination of employment with the
Company of the Participant after attaining age fifty-five (55).
2.21.VALUATION FUNDS. "Valuation Funds" means one or more of the independently
established funds or indices that are identified and listed by the
Committee. These Valuation Funds are used solely to calculate the Earnings
that are credited to each Participant's Account(s) in accordance with
Article IV, below, and does not represent, nor should it be interpreted to
convey any beneficial interest on the part of the Participant in any asset
or other property of the Company. The determination of the increase or
decrease in the performance of each Valuation Fund shall be made by the
Committee in its reasonable discretion. The Committee shall select the
various Valuation Funds available to the Participants with respect to this
Plan and shall set forth a list of these Valuation Funds attached hereto as
Exhibit A, which may be amended from time to time in the discretion of the
Committee.
ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.1. ELIGIBILITY AND PARTICIPATION.
a) Eligibility. Eligibility to participate in the Plan shall be limited
to those select key employees of Company who are designated by
management, from time to time, and approved by the Committee.
b) Participation. An employee's participation in the Plan shall be
effective upon notification to the employee by the Committee of
eligibility to participate, and completion and submission of a
Deferral Commitment, Distribution Election, Allocation Form, and
Beneficiary Designation to the Committee no later than thirty (30)
days prior to the beginning of the Deferral Period.
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c) FIRST-YEAR PARTICIPATION. When an individual first becomes eligible to
participate during a Deferral Period, a Deferral Commitment may be
submitted to the Committee within thirty (30) days after the Committee
notifies the individual of eligibility to participate. Such Deferral
Commitment will be effective only with regard to Compensation earned
and payable following submission of the Deferral Commitment to the
Committee.
3.2. FORM OF DEFERRAL. A Participant may elect a Deferral Commitment as follows:
a) FORM OF DEFERRAL COMMITMENT. A Deferral Commitment shall be made with
respect to each payment of salary and/or bonus payable by the Company
to a Participant during the Deferral Period, and shall designate the
portion of each deferral that shall be allocated among the various
Accounts. The Participant shall set forth the amount to be deferred as
a full percentage of salary and/or bonus (the Participant may
designate a different percentage of salary and bonus that is to be
deferred under this Plan). Salary Deferral Commitments shall be made
in roughly equal amounts over the calendar year. In addition, the
Deferral Commitment shall specify the Participant's initial allocation
of the amounts deferred into each Account among the various available
Valuation Funds.
b) PERIOD OF COMMITMENT. Once a Participant has made a Deferral
Commitment, that Commitment shall remain in effect for that Deferral
Period and shall remain in effect for all future Deferral Periods
unless revoked or amended in writing by the Participant and delivered
to the Committee no later than thirty (30) days prior to the beginning
of a subsequent Deferral Period.
3.3. LIMITATIONS ON DEFERRAL COMMITMENTS. The following limitations shall apply
to a Deferral Commitment, subject to amendment by the Committee upon
providing written notice to all Participants:
a) MAXIMUM. The maximum amount of each payment of base salary that may be
deferred shall be 50 percent (50%), and the maximum amount of each
payment of bonus or incentive compensation that may be deferred shall
be 100 percent (100%) less applicable taxes.
b) MINIMUM. The minimum amount of each payment of base salary that may be
deferred shall be 1 percent (1%), and the minimum amount of each
payment of bonus or incentive compensation that may be deferred shall
be 1 percent (1%).
3.4. COMMITMENT LIMITED BY TERMINATION. If a Participant terminates employment
with Company prior to the end of the Deferral Period, the Deferral Period
shall end as of the date of termination.
3.5. MODIFICATION OF DEFERRAL COMMITMENT. Except as provided in Section 5.5
below, a Deferral Commitment shall be irrevocable by the Participant during
a Deferral Period.
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3.6. CHANGE IN EMPLOYMENT STATUS. If the Committee determines that a
Participant's employment performance is no longer at a level that warrants
reward through participation in this Plan, but does not terminate the
Participant's employment with Company, the Participant's existing Deferral
Commitment shall terminate at the end of the Deferral Period, and no new
Deferral Commitment may be made by such Participant after notice of such
determination is given by the Board, unless the Participant later satisfies
the requirements of 3.1, above. If the Committee, in its sole discretion,
determines that the Participant no longer qualifies as a member of a select
group of management or highly compensated employees, as determined in
accordance with the Employee Retirement Income Security Act of 1974, as
amended, the Committee may, in its sole discretion terminate any Deferral
Commitment for that year, prohibit the Participant from making any future
Deferral Commitments and/or distribute the Participant's Account Balances
in accordance with Article V of this Plan as if the Participant had
terminated employment with the Company as of that time.
ARTICLE IV - DEFERRED COMPENSATION ACCOUNT
4.1. ACCOUNTS. The Compensation deferred by a Participant under the Plan, any
Discretionary Contributions and Earnings shall be credited to the
Participant's Account(s). Separate accounts may be maintained to reflect
the different Accounts chosen by the Participant, and the Participant shall
designate the portion of each deferral that will be credited to each
Account as set forth in Section 3.2(a), above. These Accounts shall be used
solely to calculate the amount payable to each Participant under this Plan
and shall not constitute a separate fund of assets.
4.2. TIMING OF CREDITS; WITHHOLDING. A Participant's deferred Compensation shall
be credited to each Account designated by the Participant on the 15th day
of each month or the last business day of each month consistent with normal
payroll processing. Bonus Compensation will be credited when it would
normally be payable to the participant. Any Discretionary Contributions
shall be credited to the appropriate Account(s) as provided by the
Committee. Any withholding of taxes or other amounts with respect to
deferred Compensation that is required by local, state or federal law shall
be withheld from the Participant's corresponding non-deferred portion of
the Compensation to the maximum extent possible, and any remaining amount
shall reduce the amount credited to the Participant's Account in a manner
specified by the Committee.
4.3. VALUATION FUNDS. A Participant shall designate, at a time and in a manner
acceptable to the Committee, one or more Valuation Funds for each Account
for the sole purpose of determining the amount of Earnings to be credited
or debited to such Account. Such election shall designate the portion of
each deferral of Compensation made into each Account that shall be
allocated among the available Valuation Fund(s), and such election shall
apply to each succeeding deferral of Compensation until such time as the
Participant shall file a new election with the Committee. Upon notice to
the Committee, the Participant may also reallocate the balance in each
Valuation Fund among the other available Valuation Funds as of the next
succeeding Determination Date, but in no event shall such re-allocation
occur more frequently than monthly.
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4.4. DISCRETIONARY CONTRIBUTIONS. Company may make Discretionary Contributions
to a Participant's Account. Discretionary Contributions shall be credited
at such times and in such amounts as recommended by the Committee and
approved by the Compensation Committee of the Board, or the Board in its
sole discretion shall determine. Unless the Committee specifies otherwise,
such Discretionary Contribution shall be allocated among the various
Accounts in the same proportion as set forth in section 4.1, above.
4.5. DETERMINATION OF ACCOUNTS. Each Participant's Account as of each
Determination Date shall consist of the balance of the Account as of the
immediately preceding Determination Date, adjusted as follows:
a) NEW DEFERRALS. Each Account shall be increased by any deferred
Compensation credited since such prior Determination Date in the
proportion chosen by the Participant.
b) DISCRETIONARY CONTRIBUTIONS. Each Account shall be increased by any
Discretionary Contributions credited since such prior Determination
Date in the same proportion chosen by the Participant with respect to
new deferrals as set forth above.
c) DISTRIBUTIONS. Each Account shall be reduced by the amount of each
benefit payment made from that Account since the prior Determination
Date. Distributions shall be deemed to have been made proportionally
from each of the Valuation Funds maintained within such Account based
on the proportion that such Valuation Fund bears to the sum of all
Valuation Funds maintained within such Account for that Participant as
of the Determination Date immediately preceding the date of payment.
d) EARNINGS. Each Account shall be increased or decreased by the Earnings
credited to such Account since such Determination Date as though the
balance of that Account as of the beginning of the current month had
been invested in the applicable Valuation Funds chosen by the
Participant.
4.6. VESTING OF ACCOUNTS. Each Participant shall be one hundred percent (100%)
vested at all times in the amount of Compensation elected to be deferred
under this Plan and Earnings thereon, except that the Committee may provide
that the amount of any Discretionary Contribution and Earnings thereon
shall become vested as determined by the Compensation Committee of the
Board.
4.7. STATEMENT OF ACCOUNTS. The Committee shall give to each Participant a
statement showing the balances in the Participant's Account on a quarterly
basis.
ARTICLE V - PLAN BENEFITS
5.1. RETIREMENT ACCOUNT. The Participant's Retirement Account shall be
distributed to the Participant upon the termination of employment with the
Company. Benefits under this section shall be payable as soon as
administratively practical after termination of employment. The form of
benefit payment shall be that form selected by the Participant pursuant to
Section 5.6, below, except that if the Participant terminates employment
with the Company prior to
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Retirement, the full amount of the Retirement Account shall be paid in a
lump sum payable as soon as administratively practical.
5.2. IN-SERVICE ACCOUNT. The Participant's In-Service Account shall be
distributed to the Participant upon the date chosen by the Participant in
the first Deferral Commitment which designated a portion of the
Compensation deferred be allocated to the In-Service Account. The form of
benefit payment shall be that form selected by the Participant pursuant to
Section 5.6, below. However, if the Participant terminates employment with
the Company prior to the date so chosen by the Participant, the In-Service
Account shall be added to the Retirement Account as of the date of
termination of service and shall be paid in accordance with the provisions
of Section 5.1, above.
5.3. EDUCATIONAL ACCOUNT. The Participant's Educational Account shall be
distributed to the Participant upon the date chosen by the Participant in
the first Deferral Commitment which designated a portion of the
Compensation deferred be allocated to the Educational Account. The balance
of that Account shall be distributed to the Participant in four (4) annual
installments; the annual payment amount shall be equal to the balance of
the Account immediately prior to the payment, multiplied by a fraction, the
numerator of which is one (1) and the denominator of which commences at
four (4) and is reduced by one (1) in each succeeding year. However, if the
Participant terminates employment with the Company prior to the date so
chosen by the Participant, the Educational Account shall be added to the
Retirement Account as of the date of termination of service and shall be
paid in accordance with the provisions of Section 5.1, above.
5.4. DEATH BENEFIT. Upon the death of a Participant prior to the commencement of
benefits under this Plan from any Account, Company shall pay to the
Participant's beneficiary an amount equal to the Account balance in that
Account in a manner chosen by the Participant in the most recent Deferral
Commitment. In the event of the death of the Participant after the
commencement of benefits under this Plan from any Account, the benefits
from that Account(s) shall be paid to the Participant's designated
Beneficiary from that Account at the same time and in the same manner as if
the Participant had survived.
5.5. HARDSHIP DISTRIBUTIONS. Upon a finding that a Participant has suffered a
Financial Hardship or Disability, the Committee may, in its sole
discretion, amend the existing Deferral Commitment, or make distributions
from any or all of the Participant's Accounts. The amount of such
distribution shall be limited to the amount reasonably necessary to meet
the Participant's needs resulting from the Financial Hardship or
Disability, and will not exceed the Participant's Account balances. If
payment is made due to Financial Hardship, the Participant's deferrals
under this Plan shall cease for the period of the Financial Hardship or
Disability and for twelve (12) months thereafter. Any resumption of the
Participant's deferrals under the Plan after such twelve (12) month period
shall be made only at the election of the Participant in accordance with
Article III herein.
5.6. FORM OF PAYMENT. Unless otherwise specified in paragraphs 5.2 or 5.3, the
benefits payable from any Account under this Plan shall be paid in the form
of benefit as provided below, and specified by the Participant in the Form
of Payment Designation. The most recently submitted Form of Payment
Designation shall be effective for the entire Account balance unless
amended
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in writing by the Participant and delivered to the Committee. If, at the
time payment of benefits under this Plan become due and payable, the
Participant's most recent election as to the form of payment was made
within one (1) year of such payment, then the most recent election made by
the Participant more that one year prior to the time of payment shall be
used to determine the form of payment. The permitted forms of benefit
payments are:
a) A lump sum amount which is equal to the Account balance; and,
b) Annual installments for a period of up to ten (10) years where the
annual payment shall be equal to the balance of the Account
immediately prior to the payment, multiplied by a fraction, the
numerator of which is one (1) and the denominator of which commences
at the number of annual payment initially chosen and is reduced by one
(1) in each succeeding year. Earnings on the unpaid balance shall be
based on the most recent allocation among the available Valuation
Funds chosen by the Participant, made in accordance with Section 4.3,
above.
5.7. SMALL ACCOUNT. If the total of a Participant's unpaid Account balances as
of the Participant's Retirement is less than $50,000, the remaining unpaid,
Account(s) may be paid in a lump sum at the discretion of the Committee,
notwithstanding any election by the Participant to the contrary.
5.8. WITHHOLDING; PAYROLL TAXES. Company shall withhold from any payment made
pursuant to this Plan any taxes required to be withheld from such payments
under local, state or federal law. A Beneficiary, however, may elect not to
have withholding of federal income tax pursuant to Section 3405(a)(2) of
the Code, or any successor provision thereto.
5.9. PAYMENT TO GUARDIAN. If a Plan benefit is payable to a minor or a person
declared incompetent or to a person incapable of handling the disposition
of the property, the Committee may direct payment to the guardian, legal
representative or person having the care and custody of such minor,
incompetent or person. The Committee may require proof of incompetency,
minority, incapacity or guardianship as it may deem appropriate prior to
distribution. Such distribution shall completely discharge the Committee
and Company from all liability with respect to such benefit.
5.10.EFFECT OF PAYMENT. The full payment of the applicable benefit under this
Article V shall completely discharge all obligations on the part of the
Company to the Participant (and the Participant's Beneficiary) with respect
to the operation of this Plan, and the Participant's (and Participant's
Beneficiary's) rights under this Plan shall terminate.
ARTICLE VI - BENEFICIARY DESIGNATION
6.1. BENEFICIARY DESIGNATION. Each Participant shall have the right, at any
time, to designate one (1) or more persons or entity as Beneficiary (both
primary as well as secondary) to whom benefits under this Plan shall be
paid in the event of Participant's death prior to complete distribution of
the Participant's Account balance. Each Beneficiary designation shall be in
a written form prescribed by the Committee and shall be effective only when
filed with the
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Committee during the Participant's lifetime. Designation by a married
Participant to the Participant's spouse of less than a fifty percent (50%)
interest in the benefit due shall not be effective unless the spouse
executes a written consent that acknowledges the effect of the designation,
or it is established that the consent cannot be obtained because the spouse
cannot be located.
6.2. CHANGING BENEFICIARY. Any Beneficiary designation may be changed by an
unmarried Participant without the consent of the previously named
Beneficiary by the filing of a new Beneficiary designation with the
Committee. A married Participant's Beneficiary designation may be changed
by a Participant with the consent of the Participant's spouse as provided
for in Section 6.1 above. The filing of a new designation shall cancel all
designations previously filed.
6.3. CHANGE IN MARITAL STATUS. If the Participant's marital status changes after
the Participant has designated a Beneficiary, the following shall apply:
a) If the Participant is married at death but was unmarried when the
designation was made, the designation shall be void unless the spouse
has consented to it in the manner prescribed in Section 6.1 above.
b) If the Participant is unmarried at death but was married when the
designation was made:
i) The designation shall be void if the spouse was named as
Beneficiary.
ii) The designation shall remain valid if the spouse was not name and
a non-spouse Beneficiary was named.
c) If the Participant was married when the designation was made and is
married to a different spouse at death, the designation shall be void
unless the new spouse has consented to it in the manner prescribed in
Section 6.1 above.
6.4. NO BENEFICIARY DESIGNATION. If any Participant fails to designate a
Beneficiary in the manner provided above, if the designation is void, or
if the Beneficiary designated by a deceased Participant dies before the
Participant or before complete distribution of the Participant's benefits,
the Participant's Beneficiary shall be the person in the first of the
following classes in which there is a survivor:
a) The Participant's surviving spouse;
b) The Participant's children in equal shares, except that if any of the
children predeceases the Participant but leaves surviving issue, then
such issue shall take by right of representation the share the
deceased child would have taken if living;
c) The Participant's estate.
6.5. EFFECT OF PAYMENT. Payment to the Beneficiary shall completely discharge
the Company's obligations under this Plan.
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ARTICLE VII - ADMINISTRATION
7.1. COMMITTEE; DUTIES. This Plan shall be administered by the Committee, which
shall consist of not less than three (3) persons appointed by the Board,
except after a Change in Control as provided in Section 7.5 below. The
Committee shall have the authority to make, amend, interpret and enforce
all appropriate rules and regulations for the administration of the Plan
and decide or resolve any and all questions, including interpretations of
the Plan, as may arise in such administration. A majority vote of the
Committee members shall control any decision. Members of the Committee may
be Participants under this Plan.
7.2. AGENTS. The Committee may, from time to time, employ agents and delegate to
them such administrative duties as it sees fit, and may from time to time
consult with counsel who may be counsel to the Company.
7.3. BINDING EFFECT OF DECISIONS. The decision or action of the Committee with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules
and regulations promulgated hereunder shall be final, conclusive and
binding upon all persons having any interest in the Plan.
7.4. INDEMNITY OF COMMITTEE. The Company shall indemnify and hold harmless the
members of the Committee against any and all claims, loss, damage, expense
or liability arising from any action or failure to act with respect to this
Plan on account of such member's service on the Committee, except in the
case of gross negligence or willful misconduct.
7.5. ELECTION OF COMMITTEE AFTER CHANGE IN CONTROL. After a Change in Control,
vacancies on the Committee shall be filled by majority vote of the
remaining Committee members and Committee members may be removed only by
such a vote. If no Committee members remain, a new Committee shall be
elected by majority vote of the Participants in the Plan immediately
preceding such Change in Control. No amendment shall be made to Article VII
or other Plan provisions regarding Committee authority with respect to the
Plan without prior approval by the Committee.
ARTICLE VIII - CLAIMS PROCEDURE
8.1. CLAIM. Any person or entity claiming a benefit, requesting an
interpretation or ruling under the Plan (hereinafter referred to as
"Claimant"), or requesting information under the Plan shall present the
request in writing to the Committee, which shall respond in writing as soon
as practicable.
8.2. DENIAL OF CLAIM. If the claim or request is denied, the written notice of
denial shall state:
a) The reasons for denial, with specific reference to the Plan provisions
on which the denial is based;
b) A description of any additional material or information required and
an explanation of why it is necessary; and
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c) An explanation of the Plan's claim review procedure.
8.3. REVIEW OF CLAIM. Any Claimant whose claim or request is denied or who has
not received a response within sixty (60) days may request a review by
notice given in writing to the Committee. Such request must be made within
sixty (60) days after receipt by the Claimant of the written notice of
denial, or in the event Claimant has not received a response sixty (60)
days after receipt by the Committee of Claimant's claim or request. The
claim or request shall be reviewed by the Committee which may, but shall
not be required to, grant the Claimant a hearing. On review, the claimant
may have representation, examine pertinent documents, and submit issues and
comments in writing.
8.4. FINAL DECISION. The decision on review shall normally be made within sixty
(60) days after the Committee's receipt of claimant's claim or request. If
an extension of time is required for a hearing or other special
circumstances, the Claimant shall be notified and the time limit shall be
one hundred twenty (120) days. The decision shall be in writing and shall
state the reasons and the relevant Plan provisions. All decisions on review
shall be final and bind all parties concerned.
ARTICLE IX - AMENDMENT AND TERMINATION OF PLAN
9.1. AMENDMENT. The Board may at any time amend the Plan by written instrument,
notice of which is given to all Participants and to Beneficiary receiving
installment payments, except that no amendment shall reduce the amount
accrued in any Account as of the date such notice of the amendment is
given.
9.2. COMPANY'S RIGHT TO TERMINATE. The Board may at any time partially or
completely terminate the Plan if, in its judgement, the tax, accounting or
other effects of the continuance of the Plan, or potential payments
thereunder would not be in the best interests of Company.
a) PARTIAL TERMINATION. The Board may partially terminate the Plan by
instructing the Committee not to accept any additional Deferral
Commitments. If such a partial termination occurs, the Plan shall
continue to operate and be effective with regard to Deferral
Commitments entered into prior to the effective date of such partial
termination.
b) COMPLETE TERMINATION. The Board may completely terminate the Plan by
instructing the Committee not to accept any additional Deferral
Commitments, and by terminating all ongoing Deferral Commitments. In
the event of complete termination, the Plan shall cease to operate and
Company shall distribute each Account to the appropriate Participant.
Payment shall be made as a lump sum within ninety (90) days of plan
termination.
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ARTICLE X - MISCELLANEOUS
10.1.UNFUNDED PLAN. This plan is an unfunded plan maintained primarily to
provide deferred compensation benefits for a select group of "management or
highly-compensated employees" within the meaning of Sections 201, 301, and
401 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and therefore is exempt from the provisions of Parts 2, 3 and 4
of Title I of ERISA. Accordingly, the Board may terminate the Plan and make
no further benefit payments or remove certain employees as Participants if
it is determined by the United States Department of Labor, a court of
competent jurisdiction, or an opinion of counsel that the Plan constitutes
an employee pension benefit plan within the meaning of Section 3 (2) of
ERISA (as currently in effect or hereafter amended) which is not so exempt.
10.2.COMPANY OBLIGATION. The obligation to make benefit payments to any
Participant under the Plan shall be an obligation solely of the appropriate
Company with respect to the deferred Compensation receivable from, and
contributions by, that Company and shall not be an obligation of another
company, including any other subsidiary, affiliate or subsidiary.
10.3.UNSECURED GENERAL CREDITOR. Notwithstanding any other provision of this
Plan, Participants and Participants' Beneficiary shall be unsecured general
creditors, with no secured or preferential rights to any assets of the
appropriate Company or any other party for payment of benefits under this
Plan. Any property held by Company for the purpose of generating the cash
flow for benefit payments shall remain its general, unpledged and
unrestricted assets. Company's obligation under the Plan shall be an
unfunded and unsecured promise to pay money in the future.
10.4.TRUST FUND. Company shall be responsible for the payment of all benefits
provided under the Plan. At its discretion, Company may establish one (1)
or more trusts, with such trustees as the Board may approve, for the
purpose of assisting in the payment of such benefits. Although such a trust
shall be irrevocable, its assets shall be held for payment of all Company's
general creditors in the event of insolvency. To the extent any benefits
provided under the Plan are paid from any such trust, Company shall have no
further obligation to pay them. If not paid from the trust, such benefits
shall remain the obligation of Company.
10.5.NONASSIGNABILITY. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or any part thereof, which
are, and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any
debts, judgements, alimony or separate maintenance owed by a Participant or
any other person, nor be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency.
10.6.NOT A CONTRACT OF EMPLOYMENT. This Plan shall not constitute a contract of
employment between Company and the Participant. Nothing in this Plan shall
give a Participant the right to be retained in the service of Company or to
interfere with the right of the Company to discipline or discharge a
Participant at any time.
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10.7.PROTECTIVE PROVISIONS. A Participant will cooperate with Company by
furnishing any and all information requested by Company, in order to
facilitate the payment of benefits hereunder, and by taking such physical
examinations as Company may deem necessary and taking such other action as
may be requested by Company.
10.8.GOVERNING LAW. The provisions of this Plan shall be construed and
interpreted according to the laws of the State of Iowa, except as preempted
by federal law.
10.9.VALIDITY. If any provision of this Plan shall be held illegal or invalid
for any reason, said illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if
such illegal and invalid provision had never been inserted herein.
10.10.NOTICE. Any notice required or permitted under the Plan shall be
sufficient if in writing and hand delivered or sent by registered or
certified mail. Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification. Mailed notice to
the Committee shall be directed to the company's address. Mailed notice to
a Participant or Beneficiary shall be directed to the individual's last
known address in company's records.
10.11.SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of Company and its successors and assigns. The term successors as
used herein shall include any corporate or other business entity which
shall, whether by merger, consolidation, purchase or otherwise acquire all
or substantially all of the business and assets of Company, and successors
of any such corporation or other business entity.
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MIDAMERICAN ENERGY HOLDINGS COMPANY
EXECUTIVE VOLUNTARY DEFERRED COMPENSATION PLAN
EXHIBIT A
Following are the valuation funds for the Executive Voluntary Deferred
Compensation Plan as of July 1, 1999:
o Russell 1000 Value Index (Large Cap Value)
o S&P 500 Index [dividends reinvested] (Large Cap Core)
o Russell 1000 Growth Index (Large Cap Growth)
o Russell 2000 Value Index (Small Cap Value)
o Russell 2000 Growth Index (Small Cap Growth)
o Morgan Stanley EAFE (International)
o Lehman Brothers Aggregate (Core Bond)
o 1 Year Treasury Bill Yield to Maturity [4.3% for 1999, future years set to
yield to maturity on 10/15] (Stable Value)
The Company reserves the right to change the valuation funds at any time.
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